GDP Calculation Methods

GDP Calculation Methods

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Question

The phrase, "GDP equals what you eat plus what you invest plus what you export" characterizes which of the following methods?

Answers

Explanations

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A. B. C. D.

A

The Expenditure approach has four components:

1. Personal consumption expenditure.

2. Gross private domestic investment (investments by people residing outside the country are ignored, even if they happen to be citizens of the country).

3. Government consumption & investment.

4. Net exports.

These can be summarized as "GDP equals what you eat plus what you invest plus what you export."