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We're going to define the following terms and give an example.
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Consumption.
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The use of goods and services by households.
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It is distinct from consumption expenditure, which is the purchase of goods and services for use by households.
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Goods that are consumed for their own sake to satisfy the current wants of consumers directly.
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Examples include clothing, food, tv sets, radios, etc.
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Gross, private, domestic investment.
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Is a measure of the amount of money that domestic businesses invest with within their own country.
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It constitutes one component of gdp.
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Its essential characteristics are that it is a gross investment figure.
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It only includes private investment, and it only includes domestic expenditures.
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Gdpi continued, the key factors that constitute gdpi are non -residential investment, residential investment, and change in private inventories.
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In order to calculate gdpi, you take the non -residential investment, add in the residential investment, and add in the change in inventories...