ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -When using the expenditures approach to calculating GDP the components are consumption, investment, government spending, exports, and imports.

Detailed explanation-2: -Government Spending: This is the component that has been criticized in great detail in the past few articles. Government spending simply measures the amount of money spent by the government in any given year. This expenditure does not include transfer payments i.e. payments for social security or unemployment benefits.

Detailed explanation-3: -The four components of gross domestic product are personal consumption, business investment, government spending, and net exports. 1 That tells you what a country is good at producing. GDP is the country’s total economic output for each year. It’s equivalent to what is being spent in that economy.

Detailed explanation-4: -They participate in an active learning demonstration of the GDP expenditure equation [GDP = C + I + G + (X – M)] to understand the relationships among the variables and the effect of changes in aggregate spending on GDP.