Question

Classify each of the following itoms good or which is a component of consumption expenditune, investment, or govenment expenditure on goods and services A. Banking services bought by a student B. A new limousine for the president C. A new house bought by Beyonoé D. Packing bones bought by Amazon.com O 1. A is a final service hat is investment, B is an intermediate good C is a final good that is investment, and D is an intermediate good C is a final good that is investment, and D is a final good that s investment 02. Aisafral servo that s nvestment Bisafnal pod that is government opnare. O 3. Ais a final service that is consumption expenditure, B is an intermediate good hat is consumption expenditure, B is a final good government expenditure, O S. A is a fnal service that is consumption expenditure, 8 is a fnal good that is govemment expendithure C is a final good that is oonsumption expenditure, and D is a inal good that is investment A is a finual service hat is consumpton expensture, 8 is a fral good hat is govermment expendiaure C is a final good that is consumption expenditure, and D is a final good that is investment C is a final good that is investment, and D is an intermediate good

Answer 1

Part a) Banking services bought by a student is purchase of final service, , as it will not be used for the production of any other goods or services. Since, it relates to an individual student so it is part of consumption expenditure.

Part b) A new limousine for the President is purchase of final good, as it will not be used for the production of any other goods or services. Since, the limousine has been bought for the use of President by the government so, this expenditure will come under government expenditure.

Part c) A new house bought by Beyonce is purchase of final good, as it will not be used for the production of any other goods or services. Purchase of a house by an individual is part of investment.

Part d) Packing boxes bought by Amazon.com is purchase of intermediate goods, as they will be used to produce the final goods and services.