Question : The sum of consumption, investment, government expenditure, and net exports gives us ______.
Option 1: Gross Domestic Product (GDP)
Option 2: Gross National Product (GNP)
Option 3: Net Domestic Product (NDP)
Option 4: Net National Product (NNP)
Correct Answer: Gross Domestic Product (GDP)
Solution : The correct answer is (a) Gross Domestic Product (GDP).
The sum of consumption, investment, government expenditure, and net exports gives us Gross Domestic Product (GDP). GDP is a measure of the total value of all final goods and services produced within a country's borders during a specific period, typically a year.
Consumption represents the expenditure by households on goods and services for their final use or consumption. Investment refers to expenditures made by businesses and the government on capital goods and changes in inventories. Government expenditure includes the spending by the government on goods and services. Net exports represent the difference between a country's exports and imports of goods and services.
By adding these components together, GDP captures the total expenditure on consumer goods, investment goods, government spending, and the net balance of trade. It provides an overall measure of the economic activity and output within a country's economy.
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