WBCS.LIVE practice question

National expenditure includes?

Solve this multiple-choice question and check the correct answer with its explanation below.

Answer options

  1. Consumption expenditure
  2. Investment expenditure
  3. Government expenditure
  4. All of the above

Correct answer and explanation

Correct answer: All of the above

Explanation: National expenditure refers to the total spending within an economy during a given period. It consists of consumption expenditure by households, investment expenditure by businesses on capital goods, and government expenditure on public services and infrastructure. In macroeconomics, this is represented by the expenditure method of calculating national income: Y=C+I+G+(X−M) where C = consumption, I = investment, G = government spending, and (X – M) = net exports. Hence, all the given components form part of national expenditure.