... and government (government expenditure). Each one of these users will adjust their spending depending on periodical circumstances. However if overall spending is healthy, the GDP as well as the wealth of society is rising. Citizens of countries with higher GDP are seen to have greater access to goods, services, a higher education enrolment, as well as a longer life expectancy. Consumption expenditures (C) include expenditures on newly produced durable and nondurable goods and services consumed by individuals. Investment (I) includes expenditures on newly produced plant and equipment, business structures, housing, and additions to inventories, investment spending adds to the productive capacity of the economy. Government expenditures (G) include expenditures on all newly produced government goods and services. Government spending for purposes of measuring GDP does not include transfer payments because such spending does not reflect production. A transfer payment simply shifts income from taxpayers to the transfer recipient. Government spending does ...

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