Definitions of Components of Final Demand


 Personal Consumption Expenditures:


 Personal consumption expenditures reflect the market value of goods
 and services purchased by individuals and nonprofit institutions or ac-
 quired by them as income in kind. The rental value of owner-occupied
 dwellings is included, but not the purchases of dwellings, Purchases are
 recorded at cost to consumers, including excise or sales taxes, and in
 full at the time of purchase whether made with cash or on credit. The
 nonprofit institutions included are those rendering services principally
 to individuals.


 Net Inventory Change:


 Net inventory change represents the value of the increase or decrease
 in the physical stock of goods held by the business sector valued in cur-
 rent p-ei'iod prices. These inventories are in three stages of production;
 raw materials, semifinished goods, and finished goods ready for sale or
 shipment. An inventory increase is reYaIded as investment because it
 represents production not matched by current consumption; an inventory de-
 crease is regarded as "negative investment" because it reflects consumption
 in excess of current production.


 Capital Accunu.i t. ,-, fL'' I ,'i n stLrit nc):


 Fixed investment measures additions to and replacements of private
capital b'cught about through net acquisitions by businesses and non-profit
institution.; of durable equipment and structures for business and residen-
tial purposes.