Understanding GDP and Economic Indicators

The expenditure approach calculates GDP as the market value of final output by adding up expenditures

made on the final purchase of goods and services The Income Approach calculates GDP using

the income generated in the economy over the year National Income accountants look

at four factors to calculate GDP using income: Wages - This includes the wages and salaries

for the services of labour. Rent - Rent is the payment for using natural resources.

Interest - Interest is the paying for using capital resources. Profits - Profits is the return to

risk taking by entrepreneurs. Debt-to-GDP, shows how well a country can pay back its debt using

the money it generates in one year. Low Debt-to-GDP Ratio (Ex: 30–60%) This suggests the