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  • Expenditures Approach: Personal Consumption Expenditures (C) Durable Goods Nondurable Goods Services

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    Bel Show
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    The expenditures approach measures GDP as the total value of final goods and services purchased in the domestic economy. It is calculated as the sum of personal consumption expenditures (C), gross private domestic investment (Ig), government purchases (G), and net exports (Xn). C includes durable goods, nondurable goods, and services. Ig includes machinery, equipment, construction, and inventory changes. G includes government purchases of goods and services and capital. Xn is exports minus imports.

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    The expenditures approach measures GDP as the total value of final goods and services purchased in the domestic economy. It is calculated as the sum of personal consumption expenditures (C), gross private domestic investment (Ig), government purchases (G), and net exports (Xn). C includes durable goods, nondurable goods, and services. Ig includes machinery, equipment, construction, and inventory changes. G includes government purchases of goods and services and capital. Xn is exports minus imports.

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    Expenditures Approach: Personal Consumption Expenditures (C) Durable Goods Nondurable Goods Services

    Uploaded by

    Bel Show
    The expenditures approach measures GDP as the total value of final goods and services purchased in the domestic economy. It is calculated as the sum of personal consumption expenditures (C), gross private domestic investment (Ig), government purchases (G), and net exports (Xn). C includes durable goods, nondurable goods, and services. Ig includes machinery, equipment, construction, and inventory changes. G includes government purchases of goods and services and capital. Xn is exports minus imports.

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    of 4

    Expenditures Approach

    • Personal consumption expenditures (C)


    • Durable goods
    • Nondurable goods
    • Consumer expenditures for services
    • Domestic plus foreign goods produced

    LO2
    Expenditures Approach

    • Gross private domestic investment (Ig)


    • Machinery, equipment, and tools
    • All construction
    • Positive and negative changes in inventories
    • Creation of new capital assets
    • Noninvestment transactions excluded

    LO2
    Expenditures Approach
    Gross Investment
    - Depreciation
    = Net Investment
    Net
    Investment
    Gross
    Investment
    Depreciation

    Stock
    Consumption,
    Stock of government of
    Capital expenditures, Capital
    and net exports
    January 1 Year’s GDP December 31
    LO2
    Expenditures Approach
    • Government purchases (G)
    • Expenditures for goods and services
    • Expenditures for publicly owned capital
    • Excludes transfer payments
    • Net exports (Xn)
    • Add exported goods
    • Subtract imported goods
    • Xn= exports (X) – imports (M)
    LO2
    • GDP = C + Ig + G + Xn

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