Question

On the demand side of GDP, consumption by _____________ is the largest component of GDP, accounting for about two-thirds of the GDP in any year.

Answer 1

Answer:

The correct answer is households.

Explanation:

The final consumption expenditure of households (formerly private consumption) is the market value of all goods and services, including durable products (such as cars, washing machines and personal computers), purchased by households. Home purchases are excluded, but includes the imputed income of the homes occupied by their owners. It also includes the amounts and fees paid to governments to obtain permits and licenses. In this case, household consumption expenditure includes the expenses of nonprofit institutions that provide services to households, even when the country reports them separately. This item also includes any statistical discrepancy in the use of resources in relation to the supply of resources.