Education is classified as a consumption expenditure in the National Spending Identity formula.

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Education is considered a consumption expenditure because it is an expenditure on a good or service that is consumed immediately or within a short period of time, rather than an investment that will generate future income. In the National Spending Identity formula, consumption (C) is one of the four components of total spending (GDP) along with investment (I), government spending (G), and net exports (NX).

Education Is Classified as a Consumption Expenditure in the National