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5 Cards in this Set
- Front
- Back
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Expenditure Approach Formula
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GDP = C + I + G + (X-M)
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What does C, I, G, X, M mean?
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C - Consumption (what households spend on goods and services)
I - Investment (what firms spend on capital) G - Goverment (what govt spents on goods and services) (X-M) - Net exports (amount of goods we sell abroud minus the good we consume from aboard) X - Exports M - Imports |
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If exports > imports, the net exports should be positive. When NX are positive we have a ?
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Trade Surplus
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If imports < exports. Then NX is negative we say there's a ?
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Trade deficit
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If exports = imports then NX is 0. We have a ?
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Trade Balance
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