Monday, December 20, 2010

Post 11

Formula for calculating GDP.

Step One: Calculate consumer spending
Step Two: Calculate investments
Step Three: Calculate government purchases
Step Four: Calculate net exports by subtracting imports from exports.
Step Five: Add them all together
M= C + I + G + NX (Where M equals both GDP and the national income, C equals consumer spending, I equals investments, G equals government purchases, and NX equals net exports.)
1)     Must be made in your country
2)     Must be a final good or service
3)     Must be produced within country’s border

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