Unit 3.1 · Measuring Economic Activity and Illustrating Its Variations
Calculation: Nominal GDP (Expenditure Method)
AO2AO4
Syllabus Requirement
Students must calculate nominal GDP using the formula: GDP = C + I + G + (X − M).
Assessment Objectives
AO2Application and Analysis
AO4Use of Appropriate Skills
Summary
The expenditure method is a way to calculate nominal GDP by summing up various types of expenditures in an economy. This method includes consumption, investment, government spending, and net exports, measured at current prices without adjusting for inflation. Understanding nominal GDP is important for analyzing economic activity and growth.