Question

question 4 (1 point)
purchases of inventories by:
○ foreign consumers are counted in investment spending.
○ firms are also counted in investment spending.
○ firms are not counted in investment spending.
○ households are also counted in investment spending.
○ households and firms are also counted in investment spending.

Explanation:

In macroeconomics, investment spending includes purchases of inventories by firms. Foreign consumers, households are not part of a firm's inventory investment (households' spending is consumption, foreign consumers' spending on domestic goods is net exports or exports, not investment). Firms' inventory purchases are part of investment spending. So the correct option is the one stating "firms are also counted in investment spending" (the fourth option in the list).

Answer:

The correct option is the one with the text "firms are also counted in investment spending." (Assuming the options are ordered as: 1. foreign consumers are counted in investment spending, 2. firms are also counted in investment spending, 3. firms are not counted in investment spending, 4. households are also counted in investment spending, 5. households and firms are also counted in investment spending. So the answer is the second option (if numbered 1 - 5 as per the order: 2. firms are also counted in investment spending). But based on the standard economic concept, the option "firms are also counted in investment spending" is correct.