ECONOMICS
GDP
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Income approach
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Output method
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Expenditure method
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Equilibrium GDP method
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Detailed explanation-1: -The expenditure method is the most widely used approach for estimating GDP, which is a measure of the economy’s output produced within a country’s borders irrespective of who owns the means to production. The GDP under this method is calculated by summing up all of the expenditures made on final goods and services.
Detailed explanation-2: -Expenditure Approach for GDP Formula = C + I + G + NX I = The total amount of spending on the investments in the capital assets by the private sector.
Detailed explanation-3: -When using the expenditures approach to calculating GDP the components are consumption, investment, government spending, exports, and imports.
Detailed explanation-4: -The income approach to measuring the gross domestic product (GDP) is based on the accounting reality that all expenditures in an economy should equal the total income generated by the production of all economic goods and services.