Question

Where do​ new-home sales appear in the circular flow of expenditure and​ income? Explain how a surge in new home sales affects real GDP. New home sales appear in the​ ______ category of the U.S. National Income and Product Accounts. New home sales​ _______.

Answer 1

Answer: Investment and Increases.

Explanation: Economic expansion basically depends on four factors: consumption, investment, public spending and trade balance.

GDP (Gross Domestic Product) is nothing more than the aggregate of all final goods and services produced in a country over a period of time.

The first factor that directly influences the GDP variation concerns private consumption, that is, household expenditures for the purchase of goods or services.

Another factor that has a strong influence on GDP variation is private investments, those made by companies.