Multiple choice

Purchase of tractor by a farmer is called

  1. final consumption

  2. inventory investment

  3. fixed investment

  4. intermediate consumption

Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

When a farmer purchases a tractor, it is treated as a capital good used for agricultural production over multiple years. In macroeconomic accounting, durable goods purchased by businesses or producers for production are classified as fixed investment.