Expenditure Method

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Dictionary Says

Definition of 'Expenditure Method'

A method for calculating GDP that totals consumption, investment, government spending and net exports. Although GDP can be calculated through other methods, the expenditure method is the most common. The formula for its calculation is often expressed as.

GDP = C + G + I + NX

This calculation gives us nominal GDP, which must then be adjusted for inflation to give us the real GDP.
Investopedia Says

Investopedia explains 'Expenditure Method'

GDP is supposed to measure a country’s standard of living and economic health. Critics such as Nobel Prize-winning economist Joseph Stiglitz caution that GDP should not be taken as an all-encompassing indicator of a society’s well being, since it ignores important factors that make people happy. For example, GDP does not consider work-life balance or the quality of interpersonal relationships.
Search results for

'Expenditure Method'

  • What is GDP and why is it so important?

    http://www.investopedia.com/ask/answers/199.asp
    ... can be done in one of two ways: either by adding up what everyone earned in a year
    (income approach), or by adding up what everyone spent (expenditure method). ...

  • What The National Debt Means To You

    http://www.investopedia.com/articles/economics/10/national-debt.asp
    ... One approach is the use of the Expenditure Method, which defines GDP as the sum
    of all personal consumption for durable goods, nondurable goods and services ...

  • Depreciation: Straight-Line Vs. Double-Declining Methods

    http://www.investopedia.com/articles/06/depreciation.asp
    ... a long-lived asset, such as a semi-trailer to deliver goods, the expenditure is
    not ... Note: This example uses the straight-line method of depreciation and not an ...

  • Top 3 Pitfalls Of Discounted Cash Flow Analysis

    http://www.investopedia.com/articles/07/DCF_pitfalls.asp
    ... Capital expenditure assumptions are, therefore, usually quite risky ... as using fixed
    asset turnover ratios or even a percentage of revenues method, small changes ...

  • Why The Consumer Price Index Is Controversial

    http://www.investopedia.com/articles/07/consumerpriceindex.asp
    ... Looking Deeper Governments also use the CPI to set future expenditure. ... This method
    is unaffected by whether consumers change their buying habits in response to ...

  • Financial Statements: Long-Lived Assets | Investopedia

    http://www.investopedia.com/university/financialstatements/financialstatements7.asp
    ... is tricky because it is the allocation of a prior capital expenditure to an annual
    expense. Reported profits are directly impacted by the depreciation method. ...

  • CFA Level 1 Study Guide - Macroeconomics - Gross Domestic Product ...

    http://www.investopedia.com/exam-guide/cfa-level-1/macroeconomics/gross-domestic-product.asp
    ... Statement; 6.20 Cash Flow Statement Basics; 6.21 Cash Flow Computations - Indirect
    Method; 6.22 Cash Flow Computations - Direct Method; ...

  • Profiting From A Consumerless Recovery

    http://www.investopedia.com/articles/economics/09/profit-from-a-consumerless-recovery.asp
    ... 30% is divvied up with approximately 20% to government expenditure and 10% to ... Another
    method to recovery is business spending, which is indeed investment since ...

  • R&D Spending And Profitability: What's The Link?

    http://www.investopedia.com/articles/fundamental-analysis/10/research-development-rorc.asp
    ... The same statement shows that Nokia's 2008 R&D expenditure amounted to 5.968 ... RORC
    offers investors a useful method of tracking technology companies' R&D ...

  • Valuing Firms Using Present Value Of Free Cash Flows

    http://www.investopedia.com/articles/fundamental-analysis/11/present-value-free-cash-flow.asp
    ... earnings before interest and taxes T= tax rate CAPEX = capital expenditure This
    is ... Present Value of Operating Free Cash Flows The valuation method is based on ...

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