To calculate GDP using the expenditure approach, in part it is necessary to

Question

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GDP using expenditure approach is calculated as follows:
GDP = C + I + G + (X - M)
where
C = Consumer spending
I = Business investment
G = Government spending
(X - M) = Net exports (exports - imports)
Therefore, to calculate GDP using the expenditure approach, we add exports and subtract imports. This is because imports are already included in the C, I, and G components of GDP, so adding them again would count them twice. Similarly, exports are not included in the initial calculation of GDP, so we add them to obtain the total value of goods and services produced within the country.

To Calculate GDP Using the Expenditure Approach, in Part It