Question

Which of the following items is the one type of household expenditure that is categorized as investment rather than consumption when calculating GDP?
a. the purchase of a new home
b. the purchase of a new tv
c. the purchase of a new yacht
d. the purchase of durable goods such as stoves and washing machines

Answer 1

Answer:

The current option is A,the purchase of a new home

Explanation:

The house is classified under investment because it is capable of bringing return.It is possible for the owner to sublet a part of the building in return for yearly rent or even the entire building.

The purchase of a new tv cannot be said to be income generating as it for home pleasure.

The purchase of a new yacht falls into the same category as the tv except if it purchased by a boat cruising company.

The stoves and washing machines are for usage at  home, not meant to bring in returns

Answer 2

Answer:

a. the purchase of a new home 

Explanation:

Gross domestic product is the sum of all final goods and services produced in an economy within a given period which is usually a year

GDP calculated using the expenditure approach = Consumption spending by households on durable and non durable goods + Investment spending by businesses + Government Spending + Net Export

The purchase or a new home is considered an investment and thus it is added to investment when calculating GDP .

I hope my answer helps you