S exports and therefore is registered as export

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Unformatted text preview: n living in Sweden buys a U.S.-produced sweater, this purchase is considered spending on U.S. exports and therefore is registered as export spending. All goods produced in the economy must be bought by someone in one of the four sectors of the economy. If economists simply sum the expenditures made by each sector— that is, if they sum consumption, investment, government purchases, and export spending—they will be close to computing the GDP. consumption Expenditures made by the household sector. investment Expenditures made by the business sector. government purchases Expenditures made by the government sector. Government purchases do not include government transfer payments. export spending The amount spent by the residents of other countries for goods produced in the United States. Section 2 Measuring GDP 293 11 (286-309) EMC Chap 11 11/17/05 6:05 PM EXH I BIT Page 294 11-5 The Expenditures Made by the Four Sectors of the Economy The Expenditures Made by the the Economy Sector the Sector of the economy economy Name of Name of expenditures expenditures Household Household Definition Definition Examples Examples Consumption Consumption Expenditures made by the household Expenditures made by the household sector on goods for personal use goods personal use TV sets, telephones, telephones, clothes, lamps, cars clothes, lamps, cars Business Business Investment Investment Expenditures made by the business Expenditures made by the business sector on goods used in produci...
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