Question

The article mentions the two most volatile components of GDP It refers to one of these components as "inventories:Inventory is part of the investment component of GDP Which of the following is the other volatile component of GDP mentioned in the article? Choose one:

A net exports
B. consumption
C. income
D. government spending

Answer 1

A. net exports

Step-by-step explanation:

Net exports are volatile in nature, as related to an economy the consumption and income can be estimated fairly, depending up on the needs and requirement in an economy.

But when it come to net exports, it does not individually depend upon income or status of demand in own country but also up on the spending capacity of another economy, the demand of purchasing country.

It basically relates to the country's efficiency to supply and the opposite country's demand.

Thus, it is volatile in nature.