ECONOMICS
GDP
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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consumption spending increases
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investment spending increases
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government purchases increases
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export spending increases
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Detailed explanation-1: -Personal consumption expenditures include: Durable goods-cars, furniture, large appliances. Non-durable goods-clothing, food, fuel. Services-banking, health care, education.
Detailed explanation-2: -This is because the value of intermediate goods is already reflected in the value of the final goods. Thus, if the value of these goods is also included in the current year, it will lead to the problem of double counting of the value of those goods.
Detailed explanation-3: -GDP is a measurement of the market value of all final goods and services produced in the economy. The reason why these goods are not part of the calculation is that they would be counted twice.
Detailed explanation-4: -GDP is composed of goods and services produced for sale in the market and also includes some nonmarket production, such as defense or education services provided by the government. An alternative concept, gross national product, or GNP, counts all the output of the residents of a country.