Question

Which of the following would be included in the expenditure method of calculating GDP? Check all that apply. Firedog spends $150. Hubert spends $1,000. Better Buy spends $900.

Answer 1

Sam pays Better Buy $1,000 to install a new high -definition television (HDTV) on his living room wall. He's attracted by Better Buy's guarantee that he'll be happy with the new HD1V, or he'll get his money back. ? Better Buy pays Firedog $900 to install the HDTV. ? Firedog buys hardware worth $150 from The Home Station. Assume that The Home Station gets the hardware for essentially nothing and that other costs are $0. To compute the contribution to GDP using the expenditure approach. Which of the following would be included in the expenditure method of calculating GDP? Check all that apply. Sam spends $1,000. El Better Buy spends $900. El Firedog spends $150. The total contribution to GDP, measured by the expenditure method,

Answer:

Sam spending of $1000

Explanation:

Sam's expenditure is a household consumption expenditure

Since AE = C + I + G + NX

where AE = aggregate expenditure for GDP

C = household consumption

I = investment on capital goods

G = government expenditure

NX = net export.