The document discusses how to calculate Gross Domestic Product (GDP) using the expenditure approach. GDP is the total market value of final goods and services produced within a country in a given period. It can be calculated by adding consumption, investment, government spending, and net exports. Each of these components is explained in detail, including how specific expenditures like durable goods, services, and imports/exports are treated in the GDP calculation.

1. Gross Domestic Product: Focus on the: Expenditure Approach Professor Jermaine Whirl, MBA, ED.M Information to use by students of East Georgia College

8. The Expenditure Approach Must Remember this Equation: Y=C+I+G+NX Y= Real GDP C= Consumption (US) I=Investment G=Government Expenditures NX= Net Exports (Exports-Imports)

15. Government Spending Notes: Notice that State and Local Government Spending doubles Federal Government Spending! Note 2: Note that the Federal Government Collects a lot more money in taxes than do state and local government. But the majority of it goes out as transfer payments to the population and not for general consumption of goods or services. Note 3: Much state and local spending is dedicated to educational spending! Investment spending in “human capital” Annual Nominal Government Expenditures in 2007 Federal: National Defense Consumption/Investment $578.9 Federal: Non-Defense Consumption/Investment $277.2 State and Local Consumption/Investment $1,365.9