Question

In an economy what is the expenditure made by household sector called?

• A. Investment expenditure
• B. Consumption expenditure
• C. Import expenditure
• D. Export expenditure

Hint:

Consumption expenditure refers to the spending of households on goods and services for personal use.

Answer 1

The Correct Option is B

Step 1: Understanding household sector expenditure.
The household sector’s expenditure primarily refers to the consumption of goods and services for personal use. This is called Consumption expenditure. It includes the money spent by households on everyday items, such as food, clothing, and services.

Step 2: Analyzing the options.
(A) Investment expenditure: Incorrect. Investment expenditure refers to the spending on capital goods and assets for future use, which is typically done by businesses or the government.
(B) Consumption expenditure: Correct. This is the expenditure made by households on goods and services for their consumption.
(C) Import expenditure: Incorrect. Import expenditure refers to the amount spent on goods and services that are bought from other countries.
(D) Export expenditure: Incorrect. Export expenditure refers to the cost of goods and services that are sold to other countries.

Step 3: Conclusion.
The expenditure made by the household sector is called Consumption expenditure.