The two methods of measuring the value of GDP are the ________ approaches.

Question

Quizplus · Accepted Answer

The two methods of measuring the value of GDP are the income approach and the expenditures approach. The income approach involves adding up all the incomes earned by households and businesses during the year, including wages, profits, and interest. The expenditures approach involves adding up all the spending on goods and services during the year, including consumption, investment, government spending, and net exports. These two approaches should be equal, as every dollar spent on a good or service is also a dollar earned by someone else in the economy.

The Two Methods of Measuring the Value of GDP Are