Question

How does an economist calculate GDP for one year using the expenditure approach?

A. add together all the amounts spent on final goods and services.
B. add up all the incomes received.
C. add the amounts spent on goods and services to the incomes received.
D. subtract the amounts received as income from the goods and services.

Answer 1

1) B (goods used in the production of other goods)

2)A (add together all the amounts..)

3)C (the products and income that are not reported..)

4)D (gasoline)

5)C (Real GDP is based on constant prices; nominal GDP is based on the current year's prices)

100%

Answer 2

An economist calculates the GDP for one year using the expenditure approach by adding together all the amounts spent on final goods and services. This also includes investments, government consumptions and net exports. The answer to the question would be choice A.