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Classify each of the following items as a final good or service or an intermediate good or​ service, and identify which is a component of consumption​ expenditure, investment, or government expenditure on goods and services. A. Upper A new limousine for the president B. New airplanes bought by United Airlines C. Upper A textbook bought by a student D. Packing boxes bought by Amazon

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Answer:

final good government expenditure

final goods investment

final good ; consumption expenditure

intermediate good ; investment

Step-by-step explanation:

A final good is a good that is consumed directly by consumers e.g. the textbooks bought by a student does not need to go through further production before it is suitable for use by the student.

An intermediate good is a good that is used in the production of the final good. e.g. the packing boxes bought by amazon will be used in packaging the final good demanded by consumers.

Consumption spending includes spending by households on goods and services. Consumption spending includes :

spending on durables - e.g. laptop

spending on nondurables - e.g. clothes, food

spending on services - e.g. payment of hospital bill

the purchase of a textbook by a student is an example of consumption spending on durable goods

Investment - It includes purchases of goods and services made by businesses in the production of goods and services

the airplane purchased by the airline would be used to provide services for airline customers. Also, the packing boxes bought by Amazon would be used in delivering goods to customers

Government spending - It includes government consumption expenditure and gross investment. The purchase of a new limousine for the president is an example of consumption expenditure

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