Under the expenditure method, a firm's purchase of raw materials is

left out, because it is intermediate expenditureCorrect answerYour answercounted as investmentCorrect answerYour answercounted as consumptionCorrect answerYour answercounted as government spendingCorrect answerYour answer

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CorrectNot quiteAnswer A

Correct answer: A

Only final expenditure is counted; raw materials are already in the price of the final goods.

Worth noting

If raw materials are not used up and are added to stock, that addition is counted as inventory investment.

Concept: Intermediate expenditure
Typical timeTypical: 70 s
Your timeYours: —

The rule this testsExpenditure method

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Under the expenditure method, a firm's purchase of raw materials is

Explanation