The following table provides data for an economy in a certain year. $$\begin{array} { l r }
\text { Consumption expenditures } & 1,000 \
\text { Imports } & 600 \
\text { Government purchases of goods and services } & 700 \
\text { Construction of new homes and apartments } & 500 \
\text { Sales of existing homes and apartments } & 600 \
\text { Exports } & 500 \
\text { Government payments to retirees } & 200 \
\text { Household purchases of durable goods } & 300 \
\text { Beginning-of-year inventory } & 500 \
\text { End-of-year inventory } & 600 \
\text { Business fixed investment } & 300
\end{array}$$ Given the data in the table, how much did households spend on nondurables and services?

Question

The following table provides data for an economy in a certain year. $$\begin{array} { l r } 
\text { Consumption expenditures } & 1,000 \
\text { Imports } & 600 \
\text { Government purchases of goods and services } & 700 \
\text { Construction of new homes and apartments } & 500 \
\text { Sales of existing homes and apartments } & 600 \
\text { Exports } & 500 \
\text { Government payments to retirees } & 200 \
\text { Household purchases of durable goods } & 300 \
\text { Beginning-of-year inventory } & 500 \
\text { End-of-year inventory } & 600 \
\text { Business fixed investment } & 300
\end{array}$$ Given the data in the table, how much did households spend on nondurables and services?

Quizplus · Accepted Answer

Household consumption expenditures include both durable goods (such as cars, furniture, and appliances) and nondurable goods and services (such as food, clothing, and haircuts). The table provides data on household purchases of durable goods ($300) but does not explicitly provide data on nondurable goods and services. However, we can use the data provided to calculate household spending on nondurables and services as follows:

Household consumption expenditures = Household purchases of durable goods + Spending on nondurables and services 
$1,000 = $300 + Spending on nondurables and services 
Spending on nondurables and services = $1,000 - $300 = $700

Therefore, households spent $700 on nondurables and services. The correct answer is B) 700.

The Following Table Provides Data for an Economy in a Certain