Question

The purchase of new car is included in: investment expenditure consumption expenditure on services consumption expenditure on nondurable goods consumption expenditures on durable goods

Answer 1

Consumption expenditure on durable goods

Step-by-step explanation:

Consumption expenditure includes expenditure on goods which are used for final consumption by households. This can be further classified into,

i) Expenditure on durable goods that is goods that can be used over a longer life span such as cars, furniture, refrigerator, etc

ii) Expenditure on non-durable goods that are goods that have a short-life span and thus must be stored for a longer time such as food, clothing, etc

iii) Expenditure on services such as banking, insurance, traveling, etc

Thus, purchase of a new car is included in consumption expenditure on durable goods.