Question

3. Identify the four major factors of Gross Domestic Product, and define or give an example...

3. Identify the four major factors of Gross Domestic Product, and define or give an example of each.

Homework Answers

Answer #1

Four major factors of GDP are:

  • Consumption: Consumption can be defined as total demand by the consumers in the economy. if we want to eat an ice cream then we are consumers and creating a demand.
  • Investment that is the amount the business and individuals invest to generate more capacity in the economy. THe higher the investment the more the economy will grow. Example, John buying a new tractor for hi farm.
  • Government expenditure is the demand created by the government to buy thing in the economy. It is considered as autonomous like defence spending.
  • new export, that is exports - imports its a sum total of all the exports the nation has done subtracted by all the imports they have made.
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