How to calculate gdp?

[Achilles]

I’m trying to understand how to calculate GDP for an economics assignment. I know it has something to do with consumer spending, investment, government spending, and exports minus imports, but I’m not completely sure how the formula works. Can someone explain the correct formula and maybe give a simple example? Also, what’s the difference between nominal GDP and real GDP?

 

[Adam]

GDP can be calculated in three main ways: (1) Expenditure method – GDP = C + I + G + (X − M), where C is consumption, I is investment, G is government spending, and (X − M) is exports minus imports; (2) Income method – add all incomes earned in production like wages, rent, interest, and profits; and (3) Production (output) method – add the value added at each stage of production. The expenditure method is the most commonly used formula.

 

[Aurora]

GDP is calculated by adding up a country’s total economic output. The most common formula is:

GDP = C + I + G + (X − M)
where C = consumption, I = investment, G = government spending, X = exports, and M = imports.

 

[Darcey]

GDP (Gross Domestic Product) is calculated using three main approaches. The expenditure approach is most common: GDP = C + I + G + (X − M), where C is consumption, I is investment, G is government spending, and X − M is net exports. It can also be calculated using income or production approaches.

 

[Stacy]

To calculate GDP, sum up all goods and services produced within a country in a year. Use three approaches: production (total output minus intermediate goods), income (wages, profits, taxes), or expenditure (consumption + investment + government + net exports).