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21 December, 23:32

Which of the following statements about the consumption component of GDP is not correct?

A. Since 1960, the consumption component of GDP has generally increased as a fraction of GDP.

B. The consumption component of GDP in the U. S. is greater than all three of the other components (government, investment, and net exports) combined.

C. Consumption as a fraction of total GDP in the U. S. is larger compared to all other high income nations in the world.

D. Spending on services is smaller than the amount of consumption spending on durable and nondurable goods.

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  1. 22 December, 00:11
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    D. Spending on services is smaller than the amount of consumption spending on durable and nondurable goods.

    Explanation:

    For developed countries like the U. S, there is a lot of stress in consumption of services such as good health care, appropriate and quality education and among others. These services contribute to a larger proportion of consumption component of GDP than both durable and nondurable commodities. Therefore, the statement "spending on services is smaller than the amount of consumption spending on durable and non-durable goods" is not correct
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