Expenditure Method: What It Is, How It Works, Formula

Описание: The expenditure method is a way of calculating gross domestic product (GDP) that combines consumption, investment, government spending, and net exports. It produces nominal GDP, which must then be adjusted for inflation to result in the real GDP. The method adds up consumer spending, investment, government expenditure, and net exports. Aggregate demand is equivalent to the expenditure equation for GDP in the long-run. The alternative method to calculate GDP is the income approach.
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