In the expenditure approach to measuring GDP, the components of GDP are
A) consumption, investment, government expenditure, and net exports.
B) consumption, taxes, saving, and investment.
C) frictional unemployment, structural unemployment, and cyclical unemployment.
D) inflation, unemployment, saving, and investment.

Question

Quizplus · Accepted Answer

The expenditure approach to measuring GDP includes four components: consumption (spending by households on goods and services), investment (spending by businesses on capital goods like equipment and buildings), government expenditure (spending by the government on goods and services), and net exports (exports minus imports). These four components add up to the total value of all goods and services produced within a country's borders, which is GDP.

In the Expenditure Approach to Measuring GDP, the Components of GDP