Which of the following examples of household spending is categorized as investment rather than consumption?
A)expenditures on durable goods such as automobiles and refrigerators
B)expenditures on intangibles items such as medical care
C)expenditures on new housing
D)All of the above are correct.

Question

Quizplus · Accepted Answer

Expenditures on new housing are categorized as investment because they represent a purchase of a long-term asset that is expected to appreciate in value over time. Expenditures on durable goods such as automobiles and refrigerators are also considered investment if they are used for business or rental purposes, but if they are for personal consumption, then they are categorized as consumption. Expenditures on intangible items such as medical care are also categorized as consumption because they are consumed immediately and do not represent a long-term investment.

Which of the Following Examples of Household Spending Is Categorized