GDP is divided into four main components:
Consumption (A): Spending by households on goods and services.
Investment (B): Spending on capital goods to produce future outputs.
Government Purchases and Net Exports (C): Expenditures by the government and the net difference between exports and imports.
Government consumption and net imports (D) is not a standard component of GDP.
List I | List II |
---|---|
(A) IS-LM Model | Combines Keynesian cross and elements of the theory of liquidity preference (II) |
(B) IS Curve | Shows the points that satisfy equilibrium in the goods market (I) |
(C) Intersection of IS and LM | Shows the interest rate and income that satisfy equilibrium in both markets for a given price level (IV) |
(D) LM Curve | Shows the points that satisfy equilibrium in the money market (III) |