Calculate Gross Domestic Product using different approaches
Using Expenditure Approach
Using Income Approach
Using Production Approach
Gross Domestic Product (GDP) is the total monetary or market value of all the finished goods and services produced within a country's borders in a specific time period. Our GDP calculator helps you compute GDP using three different approaches recognized by economists worldwide.
The expenditure approach calculates GDP by adding up all the expenditures made on final goods and services. The formula is:
GDP = C + I + G + (X - M)
The income approach calculates GDP by adding up all the incomes earned by factors of production in an economy. The formula is:
GDP = Wages + Rent + Interest + Profits + Indirect Taxes - Subsidies + Depreciation
This approach considers all the income generated from producing goods and services, including compensation to employees, rental income, interest income, and corporate profits.
The production approach calculates GDP by summing the value added at each stage of production for all goods and services. The formula is:
GDP = Value of Output - Value of Intermediate Consumption
This method avoids double-counting by only including the value added at each stage of production. It's particularly useful for understanding the contribution of different sectors to the economy.