Q.Give a short note on Expenditure method.

The expenditure method adds all final spending in the economy — consumption, investment, government purchases and net exports — to get national income.

• Idea: every good and service produced is finally bought by someone, so total final expenditure equals the value of total output (national income).
• Components summed (only final expenditure, to avoid double counting):
  • Private final consumption expenditure (C)
  • Gross domestic private investment (I)
  • Government final consumption expenditure (G)
  • Net exports = Exports − Imports (X − M) …