How do you calculate GDP using the expenditure approach?

Calculating GDP using the expenditure approach accounts for the sum of all final goods and services purchased in an economy over a set period. This includes consumer spending, government spending, business investment spending, and net exports. Quantitatively, the resulting GDP is the same as aggregate demand because the calculation is the same.

What is GDP based on?

1. Expenditure Approach The expenditure approach is the most commonly used GDP formula, which is based on the money spent by various groups. GDP = C + G + I + NX C = consumption or all private consumer spending within a country’s economy, including, durable goods, non-durable goods, and services.

How is GDP calculated?

The GDP estimates the size of an economy and a country's growth rate. Calculating GDP using the expenditure approach includes consumer spending, government spending, business investment spending, and net exports.