Investment expenditure refers to the expenditure incurred either by an individual or a firm or the government for the creation of new capital assets like machinery, building etc. Business inventories are goods that firms produce in one time period with the intent to sell later and they are counted as part of business investment. The purchase of house cannot be considered as investment expenditure as it may be for personal use.

Correct Option: B

Investment expenditure refers to the expenditure incurred either by an individual or a firm or the government for the creation of new capital assets like machinery, building etc. Business inventories are goods that firms produce in one time period with the intent to sell later and they are counted as part of business investment. The purchase of house cannot be considered as investment expenditure as it may be for personal use.

Investment multiplier is simply the multiplier effect of an injection of investment into an economy. The multiplier effect refers to the idea that an initial spending rise can lead to even greater increase in national income.

Correct Option: C

Investment multiplier is simply the multiplier effect of an injection of investment into an economy. The multiplier effect refers to the idea that an initial spending rise can lead to even greater increase in national income.

Gross National Product [GNP] is the gross value of all the final products without deducting the depreciation of fixed capital. Net National Product [NNP] is the value of net output in an economy during a period of one year. The difference between the GNP and NNP is equal to Capital depreciation.

Correct Option: D

Gross National Product [GNP] is the gross value of all the final products without deducting the depreciation of fixed capital. Net National Product [NNP] is the value of net output in an economy during a period of one year. The difference between the GNP and NNP is equal to Capital depreciation.

The classical economists’ belief in full employment as a normal condition of a free market economy is based on Say’s Law of Markets. It was on the basis of this law that the classical economists thought that general over-production and hence general unemployment were impossible. The law simply states “supply creates its own demand.”

Correct Option: C

The classical economists’ belief in full employment as a normal condition of a free market economy is based on Say’s Law of Markets. It was on the basis of this law that the classical economists thought that general over-production and hence general unemployment were impossible. The law simply states “supply creates its own demand.”

Good is any tangible item, whether produced or found naturally and which is available for exchange. Free good is a good that is so abundant is supply that it has no opportunity cost, for example, air. Intermediary good is a firm’s product that is used as an input into the production process of either the same firm or another.

Correct Option: B

Good is any tangible item, whether produced or found naturally and which is available for exchange. Free good is a good that is so abundant is supply that it has no opportunity cost, for example, air. Intermediary good is a firm’s product that is used as an input into the production process of either the same firm or another.