Expenditure Approach to Calculate GDP One way to calculate the gDP is to look at how the final goods and services are used. This approach is called expenditure approach. The following is the composition of GDP in terms of the expenditure(or demand) Private Consumption Gross private Investment Net investment= Gross Investment- Depreciation Government Expenditure Net Export (Export-Import) Change in Inventories Remark The consumption, investment and government expenditure defined above includes the purchases on the imported goods. This is the reason why import must be deducted from the export2 Expenditure Approach to Calculate GDP One way to calculate the GDP is to look at how the final goods and services are used. This approach is called expenditure approach. The following is the composition of GDP in terms of the expenditure (or demand) ➢ Private Consumption ➢ Gross Private Investment Net investment = Gross Investment - Depreciation ➢ Government Expenditure ➢ Net Export (Export - Import) ➢ Change in Inventories Remark: The consumption, investment and government expenditure defined above includes the purchases on the imported goods. This is the reason why import must be deducted from the export