What is the GDP formula?


Quick Answer

The GDP formula is GDP = C + I + G + (Ex - Im). "C" represents the total consumer spending, "I" represents total investment by businesses, "G" is total government spending, "Ex" is exports and "Im" is imports.

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Full Answer

Gross domestic product (GDP) is the amount a nation spends on goods and services in one year. GDP is often used to measure a country's economic performance. It is also used to measure economic growth and determine the success of economic policies. As of 2003, GDP in the United States consisted of approximately 65 percent consumer spending, 15 percent business investment, 20 percent government spending and zero net exports.

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