The government builds a new hospital building. In the expenditure method this is part of

gross domestic capital formationCorrect answerYour answergovernment final consumption expenditureCorrect answerYour answerprivate final consumption expenditureCorrect answerYour answernet exportsCorrect answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer A

Correct answer: A

A building lasts for years and adds to the capital stock, whoever builds it.
Government consumption covers its day-to-day purchases, such as salaries and medicines.

Worth noting

The spender is the government, but what is bought is a capital good, so it is investment.

Concept: Government investment
Typical timeTypical: 70 s
Your timeYours: —

The rule this testsExpenditure method

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The government builds a new hospital building. In the expenditure method this is part of

Explanation