ECO 3341 Lecture Notes - Xm Satellite Radio, Government Spending
Document Summary
Examples of consumption include items such as coffee, groceries, etc. In nipa accounts, investments exclude purely financial transactions. What is included: the purchase or production of new plant and equipment (new production only counted, not used). For example a used car is not counted in this case: all construction including the construction of owner occupied housing, research and development spending and other business intellectual property. For example spending money to establish a copyright or to get a patent is included. Prior research and development was treated as a cost. However this changed about a few years ago. Important for policymakers to have this data: changes in inventories. Some of the goods produced in 2018 won t get bought until 2018 or 2019 or later. If we look at spending for just over a year, there will be inaccuracies: on december 31, 2017, inventories contained ,000 worth of shoes.
