Which of the following four elements contribute to GDP in the expenditure approach?
a. Consumption spending, private investment, government purchases, net exports
b. Consumption spending, business investment, government purchases, imports
c. Consumption of services, private investment, government consumption, exports
d. Consumption of goods, private investment, government investment, government consumption
e. Consumption of durable goods, private investment, government purchases, net exports
A
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For-profit producers will produce only private goods because
A) buyers will be willing to pay for the goods since the benefits are excludable. B) all external benefits can be internalized using market prices. C) the cost of production can be easily determined. D) markets exist for private goods but not for public goods.
Suppose that a "doggie day care" firm uses only two inputs: hourly workers (labor) and a building (capital). In the short run, the firm most likely considers
a. both labor and capital to be fixed. b. both labor and capital to be variable. c. labor to be variable and capital to be fixed. d. capital to be variable and labor to be fixed.