Multiple Choice
Which of the following is NOT included in U.S. GDP as measured by the expenditure approach?
10. Measuring National Output and Income
Detailed Explanation of GDP Components
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Which of the following correctly lists the four main components of GDP using the expenditure approach?
A
Exports, imports, depreciation, and national debt
B
Money supply, interest rates, inflation, and unemployment
C
Consumption, investment, government purchases, and net exports
D
Wages, rent, interest, and profit
Verified step by step guidance1
Step 1: Understand that GDP (Gross Domestic Product) measures the total value of all final goods and services produced within a country during a specific period.
Step 2: Recall that the expenditure approach calculates GDP by summing up spending by different sectors in the economy.
Step 3: Identify the four main components of GDP in the expenditure approach, which are: Consumption (C), Investment (I), Government Purchases (G), and Net Exports (NX).
Step 4: Recognize that Net Exports (NX) is calculated as Exports minus Imports, representing the value of goods and services sold abroad minus those purchased from abroad.
Step 5: Confirm that the correct list of components is Consumption, Investment, Government Purchases, and Net Exports, distinguishing it from other options like wages or money supply, which are not part of the expenditure approach.
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