There are 2 methods in calculating GDP. One is called Expenditure Approach while the other is called Income Approach. However, Expenditure Approach is the method that is mostly used.
Expenditure Approach is when you add up all spending of final goods and services produced in a given year.
The Formula is: C+IG+G+XN (refer to previous post for definition)
Income Approach is a lot more work. It adds up all the income that results from selling final good and services produced in a given year.
The formula is: Wages+ Rent+ Interest+ Profit+ Structural Adjustment (includes Indirect business taxes, Depreciation, and Net Foreign Factor Payment).
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