ECONOMICS
GDP
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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consumption, investment, government purchases, and foreign exchange market
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consumption, investment, government purchases, and export spending minus import spending
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consumption, investment, transfer payments, and imports
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consumption, investment, the money supply, and government purchases
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Detailed explanation-1: -When using the expenditures approach to calculating GDP the components are consumption, investment, government spending, exports, and imports.
Detailed explanation-2: -In calculating GDP, investment does not refer to the purchase of stocks and bonds or the trading of financial assets. It refers to the purchase of new capital goods, that is, business equipment, new commercial real estate (such as buildings, factories, and stores), residential housing construction, and inventories.
Detailed explanation-3: -Government purchases are expenditures on goods and services by federal, state, and local governments. The combined total of this spending, excluding transfer payments and interest on the debt, is a key factor in determining a nation’s gross domestic product (GDP).
Detailed explanation-4: -5. The four components of GDP are consumption, such as the purchase of a music CD; investment, such as the purchase of a computer by a business; government purchases, such as an order for military aircraft; and net exports, such as the sale of American wheat to Russia. (Many other examples are possible.) 6.