ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -I = Investment expenditure. G = Government expenditure. X = Total exports. M = Total imports.

Detailed explanation-2: -What Is the Formula for GDP? 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-3: -GDP (as per expenditure method) = C + I + G + (X-IM) C: Consumption expenditure, I: Investment expenditure, G: Government spending and (X-IM): Exports minus imports, that is, net exports.

Detailed explanation-4: -The net export component of GDP is equal to the value of exports (X) minus the value of imports (M), (X – M). The gap between exports and imports is also called the trade balance. If a country’s exports are larger than its imports, then a country is said to have a trade surplus.

Detailed explanation-5: -The Output Method (all value added by each producer), The Income Method (all income generated) and. The Expenditure Method (all spending).