Question: What is the formula for calculating GDP using the expenditure approach?

Options:

1. C + I + G + (X - M)
2. C + I + G
3. C + G + (X - M)
4. I + G + (X - M)

Correct Answer: C + I + G + (X - M)

Solution:

The expenditure approach to calculating GDP is represented by the formula: GDP = C + I + G + (X - M), where C is consumption, I is investment, G is government spending, X is exports, and M is imports.