Question

Suppose that nondurable goods spending is $200 billion, durable goods spending is $400 billion, new residential housing spending is $500 billion, and spending on services is $700 billion. What does consumption equal

Answer 1

Answer:

$1,300 billion

Explanation:

total private consumption = nondurable goods spending + durable goods spending + spending on services = $200 billion + $400 billion + $700 billion = $1,300 billion

New residential housing spending ($500 billion) are considered residential investments, not part of private consumption.