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Expenditure Method

Which of the ...

Question

Which of the following is not an element of final consumption expenditure?

A

Household expenditure on food

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B

Government final consumption expenditure

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C

Household expenditure on education

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D

Expenditure on raw material

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Solution

The correct option is D
Expenditure on raw material

Expenditure on raw material is not a final consumption expenditure- it is spent on intermediate goods.

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Q. Classify the following expenditures as intermediate consumption expenditure and final consumption expenditure.
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(vii) Business expenses of the employees on tour and entertainment.

Q. How are the following treated while estimating private final consumption expenditure? Give reasons for your answer.
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