Question

For each account, identify which approach uses it to derive GDP by selecting either expenditure or resource cost-income in the approach column?

1) Expenditure approach
2) Resource cost-income approach

Answer 1

The Expenditure approach uses the account of Expenditures on Final Goods and Services, while the Resource Cost-Income approach uses the account of National Income to derive GDP.

Step-by-step explanation:

The Expenditure approach uses the account of Expenditures on Final Goods and Services to derive GDP.

This approach focuses on the total spending in the economy, including consumption, investment, government spending, and net exports.

The Resource Cost-Income approach uses the account of National Income to derive GDP.

This approach considers the total income earned by individuals and businesses in the economy, including wages, salaries, interest, dividends, rent, and profits.

Therefore, the Expenditure approach uses the account of Expenditures on Final Goods and Services, while the Resource Cost-Income approach uses the account of National Income to derive GDP.