Thursday, January 13, 2011

  • Consumption is the total of all consumer spending in the country.

  • Investment accounts for the amount businesses spend on capital.

  • Government spending is the total of all government spending.

  • Net Exports is the difference between gross imports and gross exports.

  • Calculating GDP:

    1. Add all the money spent in the country. That’s done by summing consumption, investment, government spending and net exports.

    2. Add all the income received by producers in the country.

    3. Add the market value of all goods and services produced in the country.

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