AP MacroeconomicsMeasuring the Economy
Expenditure Approach
The expenditure approach calculates GDP by summing all final spending on goods and services produced within a country.
It adds consumption, investment, government purchases, and net exports (exports minus imports). This method reflects total demand in the economy and is the most commonly used way to measure GDP in macroeconomics.
Formula / Example
GDP = C + I + G + (X - M)