Question

In the expenditure approach, what do C, I, G, NX stand for?

a) Consumption, Investment, Government spending, Net exports
b) Capital, Income, Gross domestic product, National exports
c) Corporate taxes, Inflation, Gross income, National reserves
d) Currency, Inflation, Government subsidies, National exchange rates

Answer 1

In the expenditure approach, C, I, G, NX stand for Consumption, Investment, Government spending, and Net exports; these are the components used to calculate a country's GDP.

Step-by-step explanation:

In the expenditure approach to calculating a country's gross domestic product (GDP), the four components represented by the letters C, I, G, and NX are Consumption, Investment, Government spending, and Net exports, respectively. Consumption refers to the total value of all goods and services consumed by households. Investment includes business investments in equipment and structures, residential construction, and changes in business inventories. Government spending encompasses all government expenditures on goods and services. Lastly, Net exports is calculated as the total value of a country's exports minus the total value of its imports. Together, these components make up the total aggregate expenditure in an economy, which can be seen as the sum of all spending on domestic goods and services.