Answer:
D) An increase in business inventories.
Explanation:
The words investment can mean different thing to different people, but to an economist, the word investment mean the acquisition of resources by any economic agent which will increase the productive capacity of the economy.
The correct answer here is (D) An increase in business inventories. this is because the factor of production that produced the inventories received factor income and if ignored in the measurement will create disequilibrium in the three methods of measuring GDP (i.e. output method, expenditure method and output method).
A) An increase in corporate stock volumes during the year is not correct because it is transfer of ownership not addition to production.
C) An increase in government spending is not because they are expenditure on goods and services that is not part of capital formation.
