Consumption, as a Component of GDP, Measures

question 4

Multiple Choice

Consumption, as a component of GDP, measures:

• A) spending on goods and services by individuals and households.
• B) spending on luxury items only.
• C) spending by the government.
• D) spending only on goods, not services, by individuals and households.

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Definitions:

Business-Stealing Externality

Negative impacts on existing firms due to entry of new competitors, which can steal customers and reduce profits.

New Firms

Companies that have recently entered the market, bringing innovation, competition, and potentially disrupting established market dynamics.

Existing Firms

Companies or businesses that are currently operational and active within a market or industry.

Advertising

A form of marketing communication used to promote or sell something, usually a business's product or service.