Match each spending with its component of aggregate expenditure.

Match each spending with its component of…

Question 24

MediumOriginal question

Match each spending with its component of aggregate expenditure.

List I	List II
A. A family buys a mobile phone	I. Government final consumption expenditure
B. A firm builds a new factory shed	II. Private final consumption expenditure
C. The government pays salaries of teachers in its schools	III. Exports
D. A US company buys software from an Indian firm	IV. Gross fixed capital formation

A-II, B-I, C-III, D-IVCorrect answerYour answerA-I, B-II, C-IV, D-IIICorrect answerYour answerA-IV, B-III, C-II, D-ICorrect answerYour answerA-II, B-IV, C-I, D-IIICorrect answerYour answer

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CorrectNot quiteAnswer D

Correct answer: D

Households' purchases are private consumption; a new shed is fixed investment.
The government buys teachers' services: government consumption. Sales to foreigners are exports.

Concept: Components of expenditure
Typical timeTypical: 90 s
Your timeYours: —

The rule this testsExpenditure method

Practise this chapter →

Ten questions from Measuring National Income, at your own pace.

Practise this chapter →

Ten questions from Measuring National Income, at your own pace.

Question 24

Explanation