Learning Objectives
- Expenditure approach to National Income Accounting
- The formula to calculate National Income by Expenditure Approach
In the expenditure approach to National Income, the GDP at market price is the sum of consumption expenditure, investment, government expenditure, export, and import.
GDP at Market Price = C + I + G + (X – M)
| Particular | Amount |
| Consumption (C) | xxx |
● Gross final private consumption ● Private Consumption | |
| Investment (I) | xxx |
● Gross Investment ● Gross Domestic Capital Formation (Net Capital formation (Net Fixed Capital Formation + Change in Stock or Inventory Management) + Depreciation) | |
| Government Expenditure (G) | xxx |
● Government Purchases ● Government Consumption and Investment (autonomous) | |
| Exports(X) | xxx |
| Imports (M) | |
| GDP at Market Price (E) [C+I+G+X – M] | xxx |
| Net Factor Income from Abroad (F) | xxx |
| GNP at Market Price (G) (E + F) | xxx |
| Net Indirect Tax (H) [Indirect Tax – Subsidy] | xxx |
| GNP at Factor Price (I) (G – H) | Xxx |
| Depreciation (J) | Xxx |
| NNP at Factor Price (K) (I – J) | Xxx |
Less: Social Security Allowance Retained Earning Corporate Business Tax Net Interest Add: Transfer Payment Personal interest income | |
| Personal Income | xxx |
Less: Personal tax and non-tax payment | |
| Disposable Income | xxx |
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