State and define all the components of the GDP of an economy when it is measured by using the expenditure method

Answer 1

GDP, as measured by expenditure, is commonly divided into five parts: consumption, investment, government spending, exports, and imports.

Consumption is spending by households on goods and services. Investment is the spending on capital, equipment, inventories, and structures. Government spending is spending on goods and services by local, state, and federal governments. Net exports are a measure of the gap between exports and imports. It is also referred to as the trade balance of an economy. Exports are the spending on domestically made goods that are sold abroad. An increase in exports adds to GDP, since such goods are produced locally but purchased external to the economy. Imports are spending on goods produced in other countries. An increase in imports lowers GDP since domestic dollars are spent on goods and services produced elsewhere.