Question

The biggest component of GDP using the expenditure approach is​ __________, and the biggest component of GDP using the income approach is​ __________.

A. investment in​ inventories; gross mixed income
B. final consumption​ expenditure; compensation of employees
C. government​ expenditures; consumption expenditure
D. final consumption​ expenditure; gross operating surplus

Answer 1

The biggest component of GDP using the expenditure approach is final consumption expenditure, while the biggest component of GDP using the income approach is compensation of employees.

Step-by-step explanation:

The biggest component of GDP using the expenditure approach is final consumption expenditure. This includes the spending by households on goods and services.

The biggest component of GDP using the income approach is compensation of employees. This refers to the wages, salaries, and benefits earned by individuals in exchange for their labor.

Overall, final consumption expenditure represents the largest portion of GDP when looking at the expenditure approach, while compensation of employees represents the largest portion when using the income approach.