In the national income accounts, the purchase of durables, nondurables, and services by households are classified as:
A) consumption.
B) investment.
C) government purchases.
D) net exports.

Question

Quizplus · Accepted Answer

Purchases of durables, nondurables, and services by households are classified as consumption in the national income accounts. Consumption is one of the four components of GDP and represents the total amount of goods and services bought by households. Investment refers to expenditures on capital goods by businesses, government purchases refer to expenditures made by the government on goods and services, and net exports represents the difference between exports and imports.

In the National Income Accounts, the Purchase of Durables, Nondurables