Place each of the following transactions in one of the four components of expenditure: consumption, investment,...
Place each of the following transactions in one of the four components of expenditure: consumption, investment, government purchases, and net exports.
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Apple sells a computer to a public school in Paris, Kentucky.
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Apple sells a computer to an accounting firm in Paris, Illinois.
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Apple sells a computer to a bakery in Paris, France.
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Apple sells a computer to Paris Hilton.
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Apple builds a computer to be sold next year.
Homework Answers
Answer 1) Government purchase
Since the computer has been sold to a public school ran by the government.
2.) Investment
A firm's capital expenditure is it's investment
3.) Net exports
Since the product has been sold to a foreign nation.
4.) Consumption
For private consumption, the good is sold for
5.) Investment.
It's an inventory investment, for the next year sale, the product has been designed
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