Using the expenditure approach, GDP is calculated as
A) wages + interest + rent + profits.
B) consumption expenditures + wages.
C) consumption expenditures + wages + interest.
D) consumption expenditures + investment expenditures + government expenditures + net exports.

Question

Quizplus · Accepted Answer

The expenditure approach to calculating GDP sums up total national expenditure on goods and services, which includes consumption expenditures (C), investment expenditures (I), government expenditures (G), and net exports (exports minus imports, X-M). Hence, GDP = C + I + G + (X-M).

Using the Expenditure Approach, GDP Is Calculated as