Canada's GDP grew by 0.5% in the last quarter, primarily driven by increased government spending on infrastructure projects and a significant increase in consumer durable goods purchases. Which component of GDP contributed most significantly to this growth?

Question: Canada's GDP grew by 0.5% in the last quarter, primarily driven by increased government spending on infrastructure projects and a significant increase in consumer durable goods purchases. Which component of GDP contributed most significantly to this growth?

Answer options:

• Net Exports
• Inventories ✅ Government Purchases and Consumption
• Business Gross Fixed Capital Formation

Correct answer: Government Purchases and Consumption

Explanation: GDP is calculated as C + I + G + (X - M). Increased government spending directly impacts 'G' (Government Purchases and Consumption), and consumer durable goods purchases fall under 'C' (Consumption), making this the most significant contributor.