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Place each of the following transactions in one of the four components of expenditure: consumption, investment,...

Place each of the following transactions in one of the four components of expenditure: consumption, investment, government purchases, and net exports. a. Boeing sells an airplane to the U.S. Air Force. b . Boeing sells an airplane to American Airlines. c . Boeing sells an airplane to Air France. d. Boeing sells an airplane to Amelia Earhart. e. Boeing builds an airplane to be sold next year.

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Answer #1

a. Boeing sells an airplane to the Air Force.

Government purchases

b. Boeing sells an airplane to American Airlines.

Investment

c. Boeing sells an airplane to Air France.

Net exports

d. Boeing sells an airplane to Amelia Earhart.

Consumption

e. Boeing builds an airplane to be sold next year.

Investment

GDP expenditures are sorted into several categories:

Spending by consumers,

Spending by businesses (investement),

Government purchases, and

Exports to other countries

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