GDP "EXPENDITURE"

Question 0

Consumption Expenditure (C)

Answer 0

Durable: commodities lasting 3+ years (cars)

Non-Durable: commodities lasting > 3 years (clothing)

Services: intangible (foot massage)

Question 1

What is included in the GDP expenditure side?

Answer 1

[ C, I, G, NX ]

Consumption expenditure, investment expenditure, government expenditure, & Net Exports

Question 2

Investment expenditure

Answer 2

1. Residential Investment
2. Expenditure on (K) Investment: company’s assets for their own gain
3. Expenditure on Inventories=
   A. Input inventories: storing goods ready to be used for other commodities (+)
   B. Output inventories: goods ready to be sold

MINUS: capital consumption allowance (depreciation)

Question 3

Government expenditure

Answer 3

1. Government purchases: everything that is bought by the government
2. MINUS transfer payments =

A. Unemployment Insurance (+)
B. Welfare (+)
C. Interest on NATIONAL DEBT

Question 4

Net Exports (X-Z) or (X-IM) or (NX)

Answer 4

EXPORTS
A. Sale abroad of final and intermediary goods and services that are produced domestically

B. Inbound trips of foreigners (holidays, education, medical, etc.)

Question 5

Imports (NX)

Answer 5

MINUS

A. The purchase of final & intermediary goods & services that are produced abroad and consumed domestically

B. Outbound trips of nationals (holidays, education, medical, etc.)

Question 6

Total Expenditure Formula

Answer 6

= C + I + G + NX (National Output)