What are the components of the National Spending Approach to calculating GDP?
A) consumption expenditures, transfer payments, and government investment
B) private investment, sale of new and used goods, net exports, and transfer payments
C) consumption goods and services, investment goods, government purchases, and net exports
D) wages, rent, interest, and profit

Question

Quizplus · Accepted Answer

The National Spending Approach includes four components: consumption goods and services, investment goods, government purchases, and net exports. Consumption goods and services refer to household spending on goods and services, investment goods refer to spending by businesses on capital equipment and structures, government purchases refer to spending by governments on goods and services, and net exports refer to the value of exports minus the value of imports. Transfer payments are not included in this approach as they do not represent the production of goods and services. Similarly, wages, rent, interest, and profit are components of the Income Approach, not the National Spending Approach.

What Are the Components of the National Spending Approach to Calculating