Question

What is the largest component of spending in the United States?

		consumption spending
		investment spending
		net investment spending
		government spending

Which of the following would not be counted as part of US GDP in 2019?

		Total business inventories at the end of 2019
		Local government salary payments to teachers in 2019
		Consumer spending in 2019 on automobiles built in 2019
		2019 spending by businesses on computer equipment built in 2019

Answer 1

The GDP can be defined the market value of all goods and services which are produced in the domestic territory of the country in the current financial years.

GDP=C+I+G+X-M

The largest component of spending in the US GDP is consumption spending.

Hence option first is the correct answer.

2.

At the time of calculation of GDP newly produced goods, final goods are included and sale and purchase of financial assets are not part of GDP.

The GDP can be defined the market value of all goods and services which are produced in the domestic territory of the country in the current financial years. GDP by Expenditure method

GDP=C+I+G+(X-M)

Since spending by businesses on computer equipment built in 2019 is not counted in the GDP because equipment is an intermediate good. Hence it will not counted while calculating GDP.

Hence option fourth is the correct answer.