Economic Awareness - Sectors of Indian Economy
In the expenditure method of GDP calculation, 'I' stands for which of the following?
In the expenditure method of GDP calculation, 'I' stands for which of the following?
easy Q12 of 15
Step-by-Step Solution
Step 1: Understand GDP expenditure components
'I' in the expenditure method formula represents investment expenditure.Step 2: Apply definition
Investment refers to spending on capital goods like machinery, buildings, and inventories, not income or imports.Final Answer:
Investment in capital goods → Option AQuick Check:
Investment component in GDP = spending on capital goods ✅
Quick Trick: Recall GDP = C + I + G + (X - M), where I = Investment.
Common Mistakes:
- Mistaking income or imports as investment.
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