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Unformatted text preview: vestment, and expenditures
made by the government sector are called
government purchases. (Government purchases include purchases made by all three
levels of government—local, state, and federal.) Finally, the expenditures made by the
residents of other countries on goods produced in the United States are called export
spending. Exhibit 11-5 on page 294 gives examples of goods purchased by households,
businesses, government, and foreigners.
Consider all the goods and services produced in the U.S. economy in a year: houses,
tractors, watches, restaurant meals, cars,
computers, plasma television sets, DVDs,
iPods, cell phones, and much, much more.
Suppose someone from the household sector buys a DVD. This purchase falls into the
category of consumption. When someone
from the business sector buys a large
machine to install in a factory, the purchase
is considered an investment. If the U.S. government purchases a tank from a company
that produces tanks, the purchase is considered a government purchase. If a perso...
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- Winter '14