Question

The view of GDP as the sum of money spent on purchases is called the ______ approach?

1) Income
2) Expenditure
3) Production
4) Saving

Answer 1

The 2) Expenditure Approach is the view of GDP that focuses on the sum of money spent on purchases, which is one of the main methods used to measure a nation's economic activity.

Step-by-step explanation:

The view of GDP as the sum of money spent on purchases is called the 2) Expenditure Approach.

GDP, or Gross Domestic Product, can be measured in several equivalent ways including the Expenditure Approach, which focuses on the total value of spending on final goods and services within an economy over a certain period of time.

This approach calculates GDP by adding up all consumer spending, investment, government spending, and net exports.

Another method is the National Income Approach, which adds up all the income individuals and businesses receive in a year, also giving a measure of the GDP.

Both approaches emphasize different aspects but ultimately provide a similar estimate of a nation's economic activity.