Question

Debbie spends $300 to buy her husband dinner. What type of economic activity does this transaction represent?

a) Consumption
b) Investment
c) Government spending
d) Net exports

Answer 1

The transaction represents consumption activity.

Step-by-step explanation:

The dollar value of GDP can be calculated by adding up the consumption spending, business investment, government spending, and net exports. In this case, the consumption spending is $2,000 billion. Since Debbie spending $300 to buy her husband dinner represents consumption spending, the transaction does not affect the GDP value directly. Therefore, the answer is a) Consumption.