List and describe the sources of spending in the economy by focusing o

List and describe the sources of spending in the economy by focusing on the four major sectors of the economy.

What will be an ideal response?

ANSWER

The four major sources of spending in the economy include consumption spending, which is spending by households on durable and non-durable goods and services; gross private domestic investment, which includes spending on plant and equipment (by businesses), residential construction (by households), and inventories (by businesses); government consumption expenditures and gross investment; and net exports, i.e., the difference between export spending (by foreigners on domestically produced goods and services) and spending on imports (domestic spending on foreign-made goods and services).