This is a component of GDP that comes from the spending of Households.Select one:a. Consumptionb. Governmentc. Net Exportsd. Investments
Question
This is a component of GDP that comes from the spending of Households.
Select one:
- a. Consumption
- b. Government
- c. Net Exports
- d. Investments
Solution
Break Down the Problem
- Identify the components of GDP.
- Determine which component is specifically related to household spending.
Relevant Concepts
- The components of GDP are typically categorized as:
- Consumption (C)
- Government Spending (G)
- Investments (I)
- Net Exports (NX)
Analysis and Detail
- Consumption entails spending by households on goods and services. This is the largest component of GDP in many economies.
- Government spending constitutes expenditures by the government on public services and infrastructure.
- Investments involve spending on capital goods that will be used for future production.
- Net exports represent the value of a country's exports minus its imports.
Verify and Summarize
- Since the question specifically asks for the component of GDP derived from household spending, the correct answer must be identified based on the definitions above.
Final Answer
The correct answer is a. Consumption. This component directly relates to the spending habits of households on goods and services.
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