Interpreting GDP: Expenditure Measure

GDP can be calculated in different ways. Economists can add the expenditure on goods and services produced in the economy or add the income received by labor and other inputs in the economy. The four components of the expenditure measure are consumption, investment, government spending, and net exports. The expenditure method is frequently used as consumption is the largest component of GDP for most economies. Here we discuss each component of the expenditure measure in more detail.