" All expenditure incurred by individuals during 1 year . "
In economics, most things produced are produced for sale, and sold. Therefore, measuring the total expenditure of money used to buy things is a way of measuring production. This is known as the expenditure method of calculating GDP. Note that if you knit yourself a sweater, it is production but does not get counted as GDP because it is never sold. Sweater-knitting is a small part of the economy, but if one counts some major activities such as child-rearing (generally unpaid) as production, GDP ceases to be an accurate indicator of production. Similarly, if there is a long term shift from non-market provision of services (for example cooking, cleaning, child rearing, do-it yourself repairs) to market provision of services, then this trend toward increased market provision of services may mask a dramatic decrease in actual domestic production, resulting in overly optimistic and inflated reported GDP. This is particularly a problem for economies which have shifted from production economies to service economies.
Famous quotes containing the words expenditure and/or approach:
“To predict the behavior of ordinary people in advance, you only have to assume that they will always try to escape a disagreeable situation with the smallest possible expenditure of intelligence.”
—Friedrich Nietzsche (18441900)
“Let me approach at least, and touch thy hand.
[Samson:] Not for thy life, lest fierce remembrance wake
My sudden rage to tear thee joint by joint.
At distance I forgive thee, go with that;
Bewail thy falsehood, and the pious works
It hath brought forth to make thee memorable
Among illustrious women, faithful wives:
Cherish thy hastnd widowhood with the gold
Of Matrimonial treason: so farewel.”
—John Milton (16081674)