Question

The four major expenditure categories of GDP are:

A) consumption, government purchases, taxes, and investment.
B) consumption, investment, government purchases, and stocks.
C) consumption, investment, taxes, and net exports.
D) consumption, imports, exports, and government purchases.
E) consumption, investment, government purchases, and net exports.

Answer 1

The four major expenditure categories of GDP are consumption, investment, government purchases, and net exports.

Step-by-step explanation:

The four major expenditure categories of GDP are consumption, investment, government purchases, and net exports. These categories represent the various ways in which spending occurs in the economy.

Consumption refers to the spending by individuals and households on goods and services. Investment refers to spending by businesses on capital goods like machinery and equipment.

Government purchases represent the spending by the government on goods and services, while net exports represent the difference between exports and imports of goods and services.GDP measures the total economic output of a country and it is important to count only the final output of goods and services to avoid double counting.