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26 Nov 2019

If you buy a burger and fries at your favorite fast food restaurant,

 

  1. then neither GDP nor consumption will be affected because you would have eaten at home had you not bought the meal at the restaurant.

  2. then GDP will be higher, but consumption spending will be unchanged.

  3. then GDP will be unchanged, but consumption spending will be higher.

  4. then both GDP and consumption spending will be higher.  Your purchase is a consumption good and therefore C and GDP both rise.

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Nestor Rutherford
Nestor RutherfordLv2
26 Nov 2019
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