http:/l p//ng c File Edit View Favorites Tools Help Mind Direct-from-Text Homowo

Question

http:/l p//ng c File Edit View Favorites Tools Help Mind Direct-from-Text Homowork (ASo) (12 points) ONE ATTEMPT ONLY For each form of private spending, indicate whether it represents consumption or investment. Private Spending People buying houses Firms buying trash cans Firms buying computers People buying dlothes People buying food Consumption Investment - For each form of oovernment spending, indicate whether it represents consumption or investment Government Spending Building bridges Paying workers to administer govenment programs Buying military equipment Building roads Consumption Investment

Explanation / Answer

Ans: The classification of any private of government expenditure into consumption and investment is a very subjective matter and depends on the context and the analysis of how the long term and short term benefits are associated with it.

In the above light, the classification is as below:

Private Spending:

Investment

Investment

Investment

Consumption

Consumption

Government Spending:

Investment

Consumption

Investment

Investment

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