Question

Question 12

Indicate in which expenditure of GDP the following item would be placed.
New computer for your home.
Consumer spending
Investment expenditure
O Government expenditure

Answer 1

Answer: Consumer Spending

Step-by-step explanation:

Consumer or consumption spending is the largest component of GDP and represents spending by households for goods and services. The goods purchased are to satisfy utility and not for investment.

A computer purchased for home use will therefore fall under Consumer spending because it was bought to satisfy the needs of the household. Had it been bought for a business it would have been an investment.