Explanation The GDP is the summation of the monetary value of all the goods and services produced within the political boundary of a country, within a financial year. The expenditure is a main part of the GDP consideration because all the expenditures turn out to be someone’s income, which can be calculated in the GDP. There are mainly four components of expenditure and they are as follows: (1) Consumption: The expenditures made for the purpose of consumption of goods and services by the individual or the government is known as the consumption expenditure. It is a major component of expenditure, which accounts for 70 percent of the total expenditure of the economy. The best example is the purchase of a commodity such as a televisions, refrigerators, and so forth.. (2) Investment: It is the expenditure made for the purpose of investment by the individuals or the government...

MindTap Economics, 1 term (6 months) Printed Access Card for Mankiw's Principles of Macroeconomics, 8th (MindTap Course List)

8th Edition

ISBN: 9781337096591

Author: N. Gregory Mankiw

Publisher: Cengage Learning

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Question

Chapter 10, Problem 5QR

To determine

The different components of expenditure.

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Chapter 10 Solutions

MindTap Economics, 1 term (6 months) Printed Access Card for Mankiw's Principles of Macroeconomics, 8th (MindTap Course List)

Ch. 10.1 - Prob. 1QQ Ch. 10.2 - Prob. 2QQ Ch. 10.3 - Prob. 3QQ Ch. 10.4 - Prob. 4QQ Ch. 10.5 - Prob. 5QQ Ch. 10 - Prob. 1CQQ Ch. 10 - Prob. 2CQQ Ch. 10 - Prob. 3CQQ Ch. 10 - Prob. 4CQQ Ch. 10 - Prob. 5CQQ

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Similar questions

Last year, a small nation with abundant forests cut down 200 worth of trees. It then turned 100 worth of trees into 150 worth of lumber. It used 100 worth of that lumber to produce $250 worth of bookshelves. Assuming the country produces no other outputs, and there are no other inputs used in producing trees, lumber, and bookshelves, what is this nations GDP? In other words, what is the value of the final goods the nation produced including trees, lumber and bookshelves?
How might you measure a green GDP?
List some of the reasons why economists should not consider GDP an effective measure of the standard of living in a county.

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