1. The Aggregate Expenditures Approach to calculating GDP is:
a. C+I-G-(X-R)
b. C+I+G+ (X-M)
c. C+I+MB+ (X-M)
d. b and c
Answer is b.
C + I +G + ( X - M ) is the proper formula to calculate the GDP by the aggregate expenditures appraoch.
C stands for personal consumption expenditures, I stands for gross private investment, G stands for government expenditures and gross investment, X stands for exports and M is stands for imports and represents the purchase of foreign goods and services.
thus, the GDP under the expenditures approach is calculated using this proper formula.
Get Answers For Free
Most questions answered within 1 hours.