The two main approaches to measuring GDP are the
A) concept approach and the reality approach.
B) flow approach and the stock approach.
C) government approach and the consumer approach.
D) income approach and the expenditure approach.

Question

Quizplus · Accepted Answer

The two main approaches to measuring GDP are the income approach and the expenditure approach. The income approach calculates GDP by adding up all the income earned by producers in the economy, including wages, profits, and rent. The expenditure approach calculates GDP by adding up all the spending on final goods and services in the economy, including consumption, investment, government spending, and net exports. Both approaches should theoretically give the same result, as GDP can be seen as either the total income earned in the economy or the total spending on goods and services.

The Two Main Approaches to Measuring GDP Are the