Purchase of Air Conditioner by a household is a part of gross domestic capital formation
True or False with Reasons:
Purchase of Air Conditioner by a household is a part of gross domestic capital formation.
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False,
It is the part of Private final consumption expenditure.
Explanation:-
All durable and non-durable purchases of the household is for satisfying the wants. Thus purchase of air conditioner is a consumption good and not for investment purposes.
Thus, it is not an increase in the current stock of capital during a year and does not add the current flow of goods and services.
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