ECONOMICS
GDP
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A business buys new computers for it’s office workers from a U.S. computer manufacturer. The value of the transaction would be included in which GDP category?
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consumer sector
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investment sector
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net exports
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government sector
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Explanation:
Detailed explanation-1: -In what category is the purchase of a computer by a business in national income accounting, that is, how we calculate GDP? It is considered personal consumption, included in “C". It is a form of investment spending, included in the “I".
Detailed explanation-2: -The four components of gross domestic product are personal consumption, business investment, government spending, and net exports.
Detailed explanation-3: -Government purchases include any spending by federal, state, and local agencies, with the exception of debt and transfer payments such as Social Security. Overall, government purchases are a key component of a nation’s gross domestic product (GDP).
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