Question:
Which of the following would be classified as consumption expenditure (C) when calculating Gross Domestic Product (GDP)?
(1) The purchase of wheat flour by a baker to make bread
(2) The purchase of a new computer software for the Ministry of Energy
(3) Donating used clothing to a charitable organization
(4) Purchasing 1000 shares of a public corporation
(5) Spending Rs. 3 000 for having dinner at a restaurant
Correct Answer:
(5)
Answer Explanation:
Consumption (C) includes final spending by households on durable goods, non-durable goods, and services (like a restaurant dinner). Flour for a baker is an intermediate good, software for a ministry is government spending, used clothing doesn’t involve current production, and shares are financial transactions.
Topic: National Income Year: 2022
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