Which of the following is NOT a component of Gross Domestic Product (GDP) calculated by the expenditure method?
A. Government final consumption expenditure
B. Gross fixed capital formation
C. Net factor income from abroad
D. Private final consumption expenditure
Answer: Option C
Solution (By JKSSB Mock Tests)
GDP by expenditure method includes private final consumption expenditure, government final consumption expenditure, gross fixed capital formation, and net exports. Net factor income from abroad is used to convert GDP into GNP, not a component of GDP itself.
Explanation:
The twin-deficits hypothesis posits a positive relationship between the government budget deficit and the current-account deficit, arising from the national accounting identity linking private saving, investment and the twin deficits.
No comments yet. Be the first to start the discussion!