What component of GDP includes household spending on goods and services?
Answer (1)
This is called personal consumption expenditure. It includes all the spending done by families or individuals on goods like food, clothing, school supplies, and services like transportation, haircuts, and healthcare. In the Philippines, this is a major part of economic activity. For example, when a family buys groceries from the palengke (wet market), pays their Meralco electric bill, or eats out in Jollibee, they are contributing to personal consumption. In fact, in most countries, especially in developing nations, household consumption forms a big part of GDP. It reflects how much people are able to spend, and if this number is high, it often means that the economy is healthy and people have income to use.
