Explain How GDP Is Measured According to the Expenditure and Income

question 302

Essay

Explain how GDP is measured according to the expenditure and income approaches.

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Definitions:

Wages Expense

The total amount of compensation paid to employees for services performed during a certain period; this includes salaries, wages, and possibly bonuses.

Balance Sheet

A financial declaration that collates a firm's resources, commitments, and the equity of its shareholders at an established moment.

Statement of Cash Flows

An overview illustrating the effects of changes in balance sheet positions and earnings on the availability of cash and similar assets.

Interrelationship

Interrelationship refers to the way in which two or more concepts, objects, or people are connected and affect each other.