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    Economics GDP - Edited

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    sanu
    The document defines the four major components of GDP as private consumption expenditure, investment expenditure, government purchases of goods and services, and net exports. It then provides details on the expenditures that comprise each component, such as consumer goods/services for private consumption and capital additions for investment. Intermediate outlays that are excluded from GDP, like sales of used or foreign-produced goods and illegal market sales, are also distinguished.

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    Economics GDP - Edited

    Uploaded by

    sanu
    7 views3 pages
    The document defines the four major components of GDP as private consumption expenditure, investment expenditure, government purchases of goods and services, and net exports. It then provides details on the expenditures that comprise each component, such as consumer goods/services for private consumption and capital additions for investment. Intermediate outlays that are excluded from GDP, like sales of used or foreign-produced goods and illegal market sales, are also distinguished.

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    GDP

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    Economics GDP.edited

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    The document defines the four major components of GDP as private consumption expenditure, investment expenditure, government purchases of goods and services, and net exports. It then provides details on the expenditures that comprise each component, such as consumer goods/services for private consumption and capital additions for investment. Intermediate outlays that are excluded from GDP, like sales of used or foreign-produced goods and illegal market sales, are also distinguished.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    7 views3 pages

    Economics GDP - Edited

    Uploaded by

    sanu
    The document defines the four major components of GDP as private consumption expenditure, investment expenditure, government purchases of goods and services, and net exports. It then provides details on the expenditures that comprise each component, such as consumer goods/services for private consumption and capital additions for investment. Intermediate outlays that are excluded from GDP, like sales of used or foreign-produced goods and illegal market sales, are also distinguished.

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    © All Rights Reserved
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    Download as docx, pdf, or txt
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    Economics

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    Author Note:
    Identify the four major components of GDP. 

    The four major components of GDP are mentioned below:

    1. Private Consumption Expenditure:


    2. Investment Expenditure:
    3. Government Purchases of goods and services.
    4. Net Exports:

    Classify expenditures that comprise each component of the GDP measure.

    1. Private Consumption Expenditure: in this component, it measures the money value


    of the consumer's services and goods which has been purchased by the ordinary
    households or by the non-profit institution for current utilisation of a period of
    account (Crowley & Hallett, 2015).
    2. Investment Expenditure: the term investment means to add a capital during a
    particular period. The investment also includes the building machinery housing
    construction or in addition to a firms inventories of goods.
    3. Government Purchases of goods and services: in this part, it shows the expenditure
    of the government on various goods and services. This includes the purchase of the
    intermediate goods, wages and salaries which has been paid by the government. Such
    kinds of purchase are often treated as part of the final product (Crowley & Hallett,
    2015).
    4. Net Exports: in this part, it shows the difference between the domestic spending on
    the foreign goods which is the imports (M) and the outside spending on the domestic
    goods which is the export (X). The difference between the export and the imports of
    the country call the Net Exports.

    Distinguish the intermediate outlays that are excluded from the GDP
    statistic.

    Based on the video it can understand that the products which are made inside the country no
    matter who will produce that good can be calculated in the GDP. There are a few things
    which do not include in the GDP which are as follows:

    1. The sales of goods that were produced outside will be excluded from the GDP
    statistics.
    2. Sales of the used goods will be not calculated.
    3. Illegal sales of goods and service which is considered as a black market.

    References:

    Crowley, P. M., & Hallett, A. H. (2015). Great moderation or “Will o’the Wisp”? A time–
    frequency decomposition of GDP for the US and UK. Journal of Macroeconomics, 44, 82-
    97.

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