Which of the following is NOT a method to calculate GDP? (2020)

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Question: Which of the following is NOT a method to calculate GDP? (2020)

Options:

Correct Answer: Consumption approach

Exam Year: 2020

Solution:

The consumption approach is not a recognized method to calculate GDP; the three main methods are production, income, and expenditure approaches.

Which of the following is NOT a method to calculate GDP? (2020)

Which of the following is NOT a method to calculate GDP? (2020)

Step 1: Understand what GDP is. GDP stands for Gross Domestic Product, which measures the total value of all goods and services produced in a country.
Step 2: Learn about the three main methods to calculate GDP: production approach, income approach, and expenditure approach.
Step 3: Identify the methods: The production approach calculates GDP based on the output of industries. The income approach calculates GDP based on the income earned by individuals and businesses. The expenditure approach calculates GDP based on total spending on goods and services.
Step 4: Recognize that the consumption approach is not one of the three main methods to calculate GDP.
Step 5: Conclude that the consumption approach is NOT a recognized method to calculate GDP.

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