The Four Categories of Expenditure Used by the Expenditure Approach

question 86

Multiple Choice

The four categories of expenditure used by the expenditure approach method to calculate GDP are

• A) consumption expenditure, taxes, saving and investment.
• B) consumption expenditure, investment, net imports and saving.
• C) saving, taxes, government expenditure and investment.
• D) consumption expenditure, investment, government expenditure and net exports.

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Definitions:

Variable Manufacturing Cost

Costs that vary directly with the level of production output, including direct materials and variable labor costs.

Production Volume

The total number of units produced during a specific period, reflecting the level of manufacturing activity.

Fixed Manufacturing Cost

Costs that remain constant regardless of the level of production or sales activities, such as salaries, rent, and depreciation on manufacturing equipment.

Production Volume

The total quantity of products or goods produced by a company within a specific period.