When the expenditure approach is used to measure GDP, the major components of GDP are
A) consumption, investment, indirect business taxes, and depreciation.
B) employee compensation, rents, interest, self-employment income, and corporate profits.
C) employee compensation, corporate profits, depreciation, and indirect business taxes.
D) consumption, investment, government consumption and gross investment, and net exports.

Question

Quizplus · Accepted Answer

The expenditure approach measures GDP by adding up the sum of four components: consumption, investment, government consumption and gross investment, and net exports. Consumption accounts for the purchases made by households on goods and services, while investment accounts for purchases made by businesses on capital goods. Government consumption and gross investment measure the spending by government entities and net exports measures the difference between exports and imports.

When the Expenditure Approach Is Used to Measure GDP, the Major