Total spending in an economy is the sum of:
A) durable goods plus nondurable goods plus services.
B) imports minus exports.
C) personal consumption plus gross private investment plus government spending plus net exports.
D) food plus housing plus business plus government spending.

Question

Quizplus · Accepted Answer

Total spending in an economy is measured by gross domestic product (GDP), which is the sum of personal consumption expenditures, gross private investment, government consumption and investment, and net exports (exports minus imports). Therefore, option C is the correct answer. Option A only includes goods and services but excludes gross private investment and government spending. Option B calculates the difference between imports and exports but ignores personal consumption and gross private investment. Option D only lists a few specific categories of spending and does not include government spending or net exports.

Total Spending in an Economy Is the Sum Of