ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The formula for GDP is: GDP = C + I + G + (X-M). C is consumer spending, I is business investment, G is government spending, and (X-M) is net exports.

Detailed explanation-2: -C = total spending by consumers. I = total investment (spending on goods and services) by businesses. G = total spending by government (federal, state, and local)

Detailed explanation-3: -Consumer spending is the largest component of Gross Domestic Product (GDP) and the target of Keynesian fiscal and monetary policy in macroeconomics. Other economists, sometimes known as supply-siders, accept Say’s Law of Markets and believe private savings and production are more important than aggregate consumption.

Detailed explanation-4: -C=Consumer spending on goods and services (final consumption expenditure or personal consumption) I=Investor spending on business capital goods (gross investment) G=Government spending on public goods and services (government consumption) X=Exports of goods. M=Imports of goods.