Calculating GDP using the expenditure approach?

GDP expenditure approach calculations?

  • Trying to figure out what fits in the C+I+G+NX sections... consider economy that produces only two goods, gas and oil.... revenue from selling gas: 4800000 cost of buying fresh oil from other company: 1300000 interest on funds borrowed to buy refinery: 900,000 wages paid to employees: 1200000 taxes: 500,000 revenue from oil: 1300000 rent on land: 400000 wages to employees: 500000 taxes: 300000 trying to calculate this using expenditure, production and income approaches..

  • Answer:

    Only income approach is possible. GDP=compensation of employers+rent+interest+propietor's income+corporate profits+indirect business taxes+depreciation+net foreign factor income.

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