Term 1 - TOPIC 2 UNIT 3 (p36)

Question 1

Gross fixed capital formation means the country is investing in 2 areas. Name them.

Answer 1

1) Fixed assets (EXAMPLE: machinery)
2) Current assets (EXAMPLE: inventories or stock)

Question 2

When a company spends money on CAPITAL GOODS, it is called …………………………….. which is indicated by a symbol (I)

Answer 2

Gross fixed capital formation OR also called investment spending

Question 3

Gross capital formation means NO provision was made for …………………… of fixed capital.

Answer 3

consumption

Question 4

Investment is divided into a)
b)

Answer 4

a) gross fixed capital formation
b) changes in inventories (current assets) which refers to good produced:
> during a period, but not sold in the period
> in an earlier period, sold in the CURRENT period

Question 5

Provide the symbol for the following:

Final CONSUMPTION expenditure

Answer 5

C

Question 6

Provide the symbol for the following:

Consumption expenditure by GOVERNMENT

Answer 6

G

Question 7

Provide the symbol for the following:

Gross fixed capital formation

Answer 7

I

Question 8

Gross fixed capital formation is classified in 3 ways. Name them.

Answer 8

1) Type of ECONOMIC activity: (primary/secondary/tertiary sector)
2) Type of ORGANISATION: (public/general government/private
business)
3) Type of ASSET : (transport equipment / residential buildings /
construction / land improvements)