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The _____ adds up the market prices of final goods and services to calculate Gross Domestic Product (GDP). expenditure approach income approach product approach

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User Andrae
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2 Answers

3 votes

Answer: The answer is the expenditure approach

Explanation: Gross domestic product (GDP) is the total market value of the goods and services produced by a country’s economy during a specified period of time.

The expenditure method is a system for calculating gross domestic product (GDP) that combines consumption, investment, government spending, and net exports. It is the most widely used approach to calculating GDP. The final users of goods and services are divided into three main groups: households, businesses, and the government.

The formula using expenditure approach for GDP = Consumption + Investment + Government Spending + Net Exports.

The expenditure approach interprets that output produced in an economy has to be consumed by final users, which are either households, businesses, or the government. Therefore, the sum of all the expenditures by these different groups should equal total output which is the GDP.

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User Codymanix
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5 votes

Answer:

expenditure approach

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User Fersca
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