list the four components of GDP and provide an example of each, explaining how e

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The broad components of GDP are: consumption, investment, net exports, government purchases, and inventories. Consumption is by far the largest component, totalling roughly 2/3rds of GDP. The basic concept Economists define gross domestic product as the sum of several components. Specifically, GDP is calculated by adding together four figures: the amount of consumption of goods and services by private individuals and businesses; business investment in capital for production of goods and services; the amount of spending and consumption by government agencies at all levels; and the net amount of exports to other countries. The components of GDP (Gross Domestic Product) will tell you what the U.S. is good at producing. Over 70% of what the U.S. produces is for personal consumption. The remaining 30% of GDP is business investment (16%) and government (19%), of which one-third is defense. The largest components of personal consumption include: More than 40% of GDP are services. The two largest components are real estate (10%) and health care (12%). Non-durable goods are 20% of GDP. The three largest components are food (10%), clothing (2.7%) and fuel (2.4%). Durable goods, such as autos (3.6%) and furniture (3%) is the smallest, at only 8% of GDP. COMPONENTS OF GDP I. Personal consumption a) Durables --> Durable goods, such as autos (3.6%) and furniture (3%) is the smallest, at only 8% of GDP. b) Nondurables --> Non-durable goods are 20% of GDP. The three largest components are food (10%), clothing (2.7%) and fuel (2.4%). c) Services --> More than 40% of GDP are services. The two largest components are real estate (10%) and health care (12%). II. Private investment a) Nonresidential b) Structures c) Producers' durables d) Residential III. Exports & Imports a) Goods b) Services IV. Government expenditures a) Federal -- i. Defense and ii. Nondefense b) State and local

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