Calculation: Nominal GDP (Expenditure Method)
Measuring Economic Activity and Illustrating Its Variations
AO2·AO4
Syllabus requirement
Students must calculate nominal GDP using the formula: GDP = C + I + G + (X − M).
Assessment objectives
AO2 Application and AnalysisAO4 Use of Appropriate Skills
Summary
This topic explains how to calculate nominal GDP using the expenditure method by adding consumption (C), investment (I), government spending (G) and net exports (X - M). Nominal GDP is measured at current prices and is not adjusted for inflation, so it differs from real GDP which would be deflated to remove price changes. Understanding the distinction matters for comparing output over time and for converting GDP into GNI when net income from abroad is included.