In the Spending Approach to GDP, consumption expenditures are
A) government and private spending on final goods and services.
B) private spending during all stages of production of goods and services.
C) private spending on all final goods and services excluding investment purchases.
D) private spending on tools, plants, and equipment used for future production.

Question

Quizplus · Accepted Answer

Consumption expenditures refer to private spending on final goods and services, excluding investment purchases (such as tools, plants, and equipment used for future production). Therefore, option C is the correct choice. Options A and B are partly incorrect, as they include government and all private spending during all stages of production, respectively. Option D refers to investment expenditures.

In the Spending Approach to GDP, Consumption Expenditures Are