Explain Which Expenditure Category of GDP Changes and the Direction

question 2

Essay

Explain which expenditure category of GDP changes and the direction of the change that results for each transaction described.
a. A domestic business purchases a domestically produced computer to use in a business office.
b. A domestic business produces a computer that is sold to a foreign company.
c. The federal government purchases a domestically produced computer to use in a court house.
d. A domestic household purchases a domestically produced computer to use in a home.
e. A domestic household purchases a computer produced in a foreign country to use in a home.

---

Definitions:

Equity Investment Securities

Financial assets purchased with the expectation of earning a return through dividends, capital appreciation, or both.

Retained Earnings

The portion of a company's profits that is kept or retained for reinvestment in the business or to pay debt, rather than distributed to shareholders.

Payment

The act of giving or transferring money or monetary value in exchange for goods, services, or to fulfill a legal obligation.

Shares

Units of ownership interest in a corporation or financial asset, providing an entitlement to a portion of the profit.