Which of the following is a GDP component?

• A. Consumption (Household Spending)
• B. Inflation Rate
• C. Money Supply
• D. Budget Surplus

Answer: (A)

GDP is the total value of final goods and services produced in a country, and it is often measured by adding up expenditures in four areas: household spending (consumption), business investment, government purchases, and net exports. Household consumption is the spending by households on goods and services, including durable goods, nondurables, and services. It directly contributes to the GDP calculation, which is why it’s the correct choice. The other options describe price changes (inflation rate), a monetary quantity (money supply), and a fiscal outcome (budget surplus)—none of which are direct GDP expenditure components.