What are the four spending components of GDP? Include examples.

Expert Solution

Components of GDP

A.Consumption-Household spending.It is the largest component of GDP.Example-Buying of a car for personal use.

B.Investment-Spending by businesses.Example-Buying a car for official purpose only.

C.Government spending-Spending by federal,state and local government.Example-Transfer payments

D.Net exports-Exports-Imports

Export-US(home country) selling cars to Japan.

Import-Americans buying japanese cars.

Rahul Sunny answered 2 years ago

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