In the Expenditure Approach to Measuring GDP,the Components of GDP

question 9

Multiple Choice

In the expenditure approach to measuring GDP,the components of GDP are

• A) consumption, investment, government expenditure, and net exports.
• B) consumption, taxes, saving, and investment.
• C) inflation, unemployment, saving, and investment.
• D) frictional unemployment, structural unemployment, and cyclical unemployment.

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Definitions:

Total Utility

The total satisfaction received from consuming a given total quantity of a good or service.

Income

The money received by an individual or business in exchange for labor, services, or investment, constituting a basis for consumption and savings.

Consumer Equilibrium

The point at which the amount of goods purchased by a consumer is equal to their preference at prevailing market prices, maximizing utility.

Utility

The satisfaction or benefit a consumer derives from consuming a good or service.