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The Distinction Between Consumption and Investment Is

Question 22

Multiple Choice

The distinction between consumption and investment is:


A) that only households consume and only businesses invest.
B) somewhat arbitrary, since investment includes housing investment, which does not increase future productive capacity.
C) that investment always increases future productive capacity, while consumption does not.
D) arbitrary, since the same expenditure may be counted as a consumption item in one year and an investment in another.

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