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A Different Kind of Purchase

While economists are calculating the GDP, what do they take into consideration? One thing is the purchase of goods and services. They measure economic activity in four different areas: consumer purchases, business purchases, government purchases, and national exports.

  1. Consumer or household purchases are things people buy for their own personal use.
  2. Business purchases are things producers or businesses buy to produce other goods or services while trying to make a profit.
  3. Government purchases are goods or services bought by governments. This can include national, state, or local sectors.
  4. National exports are anything one nation sells to another.
 

Which One?

Decide whether each purchase would be considered a consumer purchase, business purchase, government purchase, or a national export when figuring the GDP. For each of the items below, click on the drop-down list and choose the best response.

  1. The United States sells rice to China.  
  2. A woodworker buys tools to make chairs to sell.  
  3. The president of the United States buys a jet to travel to different political events.  
  4. A home owner buys a new refrigerator.  
  5. An artist buys art supplies to create paintings to sell.