Tuesday, December 21, 2010

Post 11- 3 rules and 4 ingredients create a recipe or math formula that explains how GDP is calculated!

First calculate consumer spending, then Calculate investments, next calculate government purchases, after that calculate net exports by subtracting imports from exports and finally add them all together
M= C + I + G + NX (M= both GDP and the national income, C =consumer spending, I = investments, G = government purchases, and NX= net exports.)
1)     Must be made in your country
2)     Must be a final good or service
3)     Must be produced within country’s border

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