3-1:The Composition of GDP O The first component of gDP is consumption c) INvestment( is sometimes called fixed investment to distinguish it form inventory/ investment Nonresidential investment Residential investment EGovernment spending, G) Not include government transfers ONet exports X-Q)is the difference between exports(X) and imports(Q) O Inventory investment(s) is the difference between goods produced and goods sold in a given year 2003-6-29 32003-6-29 3 3-1:The Composition of GDP ●The first component of GDP is consumption,(C) ●Investment (I) is sometimes called fixed investment to distinguish it form inventory investment. •Nonresidential investment • Residential investment ●Government spending,(G) • Not include government transfers ●Net exports(X-Q) is the difference between exports(X) and imports(Q). ●Inventory investment(IS ) is the difference between goods produced and goods sold in a given year