How does the expenditure approach calculate GDP?
____________________________________
A. It adds up all the incomes in the economy.*****
B. It adds up the value of four groups of final goods and services.
C. It adds up the value of business goods and services.
D. It adds up the value of consumer goods and services
No.
http://www.investopedia.com/terms/e/expenditure-method.asp
I'm probably wrong but I think it is C
no its not C either
grrrr, my brain is fried
I think this has your answer:
http://econport.org/content/handbook/NatIncAccount/CalculatingGDP/Expenditures.html
The correct answer is B. The expenditure approach calculates GDP by adding up the value of four groups of final goods and services. These four groups are:
1. Personal Consumption Expenditures (C): This includes all goods and services purchased by individuals and households, such as food, clothing, cars, and medical expenses.
2. Gross Private Domestic Investment (I): This includes all investment spending by businesses, such as purchases of machinery, equipment, and construction of new buildings. It also includes changes in business inventories.
3. Government Consumption and Investment (G): This includes all government spending on goods and services, such as defense, education, and infrastructure.
4. Net Exports (X - M): This refers to the difference between exports (X), which are goods and services produced domestically and sold abroad, and imports (M), which are goods and services produced abroad and purchased domestically.
To calculate GDP using the expenditure approach, you add up the value of all final goods and services produced in the economy by each of these four groups. This approach reflects the total value of spending in the economy and is one of the methods used to measure the overall economic activity and size of an economy.