What Type of Spending Is the Most Important Component of the GDP

question 130

Multiple Choice

What type of spending is the most important component of the GDP?

• A)consumption
• B)government purchases
• C)net exports
• D)investment

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Definitions:

Balance Sheet

A financial summary that captures the essence of a company’s assets, debts, and the share of equity belonging to investors at a given time.

Incurred

To suffer or become subject to an obligation, usually a cost or expense, as a result of one's actions or the operation of a business.

Accrual Accounting

A financial recording technique that logs income and expenditures at the time they are accrued or incurred, irrespective of the actual cash flow timing.

Net Income

The total profit of a company after all expenses, taxes, and costs have been subtracted from total revenues.