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Multiple Choice
The purchase of a computer by a person for household use would be counted in which category of GDP?
A
Consumption
B
Net Exports
C
Government Spending
D
Investment
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Verified step by step guidance
1
Understand the components of GDP, which are Consumption (C), Investment (I), Government Spending (G), and Net Exports (NX).
Recall that Consumption includes spending by households on goods and services for personal use, such as food, clothing, and durable goods like computers.
Recognize that Investment refers to business spending on capital goods, residential construction, and changes in inventories, not household purchases.
Note that Government Spending includes government expenditures on goods and services, excluding transfer payments.
Identify that Net Exports represent the value of exports minus imports, related to international trade, not household purchases.