1) The expenditure approach: This approach calculates GDP by summing up the expenditures made by individuals, businesses, governments, and foreigners on final goods and services produced within a country's borders. It includes consumption expenditure, investment expenditure, government expenditure, and net exports (exports minus imports).
2) The income approach: This approach calculates GDP by summing up the incomes earned by individuals and corporations in the production of goods and services. It includes wages, salaries, profits, interests, rents, and other income components. This approach provides a measure of the total income generated within an economy.
3) The production approach: This approach calculates GDP by directly measuring the total value of goods and services produced within an economy over a specific period. It involves summing up the value-added at each stage of production, from raw material extraction to final product manufacturing. This approach provides a measure of the total output or production within an economy.
What is three approaches used to measure GDP
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