Under this approach, the GDP is measured as the value of all goods and services purchased by the government and households. This will also take imports, exports, and investments into considerations.
In Expenditure Approach, we find out the GDP by adding the following economic variables:
> Personal Consumption
> Gross Investment
> Government Consumption
> Net Exports of Goods and Services
GDP can also be measured using the Resource Cost-Income Approach in this GDP Calculator. The Resource Cost-Income Approach indicates the total value of profit, wages, depreciation, taxes, and net income of the foreigners.
To find out the GDP, using this GDP Calculator, under the Resource Cost-Income Approach, another economic phenomenon named GNP or Gross National Product is estimated at first.
GNP or Gross National Product is estimated by adding the following economic variables:
> Employee Compensation
> Proprietor’s Income
> Corporate Profits
> Interest Income
After we have the estimated GNP or Gross National Product, the GDP calculator will find out the estimated GDP by adding:
> Estimated GDP (employee compensation + proprietor’s income + corporate profits + rents+ interest income)
> Indirect Business Taxes
> Net Income of Foreigners*
*The Net Income of Foreigners is the difference between the foreigners domestically earned income and income earned abroad by the domestic citizens.