Question

Classify each of the following items as a component consumptions expenditure, investment, or government expenditure on...

Classify each of the following items as a component consumptions expenditure, investment, or government expenditure on goods or services:
a. Refrigerator bought by a homemaker.
b. X-Ray devices bought by the Ministry of Health.
c. Coffee beans bought by Starbucks
d. New coffee grinders bought by Starbucks

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a. Refrigerator bought by a homemaker. - Consumption expenditures. This is an expenditure made by a household on durable consumer goods.

b. X-Ray devices bought by the Ministry of Health-Government expenditure. This is an investment Expenditure made by a government body on a Capital good.

c. Coffee beans bought by Starbucks-Investment. Investment beans will be used by Starbucks to further deliver service . IT is not a consumption expenditure . IT is a part of the Inventory.

d. New coffee grinders bought by Starbucks-Investment.THe coffee grinders are capital goods, which will be used to provide services . They are a part of fixed investment.

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