Question

The _____ adds up the spending by different parts of the economy, such as consumption, investment, government spending, and net exports. a) income approach b) product approach c) expenditure approach.

Answer 1

Answer:

The answer is c) expenditure approach.

Explanation:

This approach assumes that the final amount of products and services equals the amount spent on them. It is the most common way to measure a country's GDP, and as the passage explains, takes different factors into account (e.g. consumer and government spending). These factors are then added up, and the result indicates the general expenses in a period of timme.