ECONOMICS
GDP
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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C
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I
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G
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(Ex-Im)
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Detailed explanation-1: -To do this, GDP(which we denote as Y) is divided into four components(Components of GDP). Consumption (C), Investment (I), Government purchases (G), and Net exports (NX). Y = C + I + G + NX.
Detailed explanation-2: -When using the expenditures approach to calculating GDP the components are consumption, investment, government spending, exports, and imports.
Detailed explanation-3: -G = total government expenditures, including salaries of government employees, road construction/repair, public schools, and military expenditure. I = sum of a country’s investments spent on capital equipment, inventories, and housing.
Detailed explanation-4: -In broad terms, an increase in real GDP is interpreted as a sign that the economy is doing well. When real GDP is growing strongly, employment is likely to be increasing as companies hire more workers for their factories and people have more money in their pockets.