In the expenditure method, the final expenditure incurred by the government on goods and services includes:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → both consumption and investment expenditure
In the expenditure method, government final expenditure covers both consumption and investment expenditure.
NCERT (2026-27): “2.2.2 Expenditure Method … (c) the expenditure that the government makes on the final goods and services produced by firm i. We shall denote this by Gi. We may point out that the final expenditure incurred by the government includes both the consumption and investment expenditure …” |