Question

From Disposable Income, ____________ (the C in the expenditures model used to calculate GDP) is subtracted to arrive at Personal Savings by all Households within our economy.
a. Consumption of Fixed Capital
b. Personal Consumption Expenditure
c. Capital Investment
d. None of the above

Answer 1

Answer:

b. Personal Consumption Expenditure

Explanation:

The Personal Consumption Expenditure is a way to measure how much money an American person spends in goods and services at a national level.

It divides in two categories, Goods and Services.

Goods: it divides in two sub-categories, these are durable goods which are long-lasting items, such as cars and washing machines and non-durable goods which are items that households use quickly, like groceries and clothing.

Services: These are the functions that businesses provide, so the households don't have to do it, for example, dry cleaners, yard maintenance, and financial services.