The expenditure approach to computing GDP measures
A) U.S.spending on all goods.
B) U.S.spending on only U.S.goods.
C) U.S.and foreign spending on only U.S.goods
D) only foreign spending on foreign goods.

Question

Quizplus · Accepted Answer

The expenditure approach to computing GDP measures the total spending on goods and services produced within a country's borders, including the spending of both domestic and foreign consumers, businesses, and the government. However, it only considers spending on domestically produced goods, which is why option B, U.S. spending on only U.S. goods, is incorrect. Option A, U.S. spending on all goods, is also incorrect as it includes spending on foreign-produced goods. Option D is incorrect because it only includes foreign spending on foreign goods, which is not relevant for calculating a country's GDP. Therefore, the best choice is C, which correctly includes U.S. and foreign spending on only U.S. goods.

The Expenditure Approach to Computing GDP Measures