Gross Domestic Product as the Sum of Expenditures

Since by definition, Gross Domestic Product is the market value of production for final use, and there are just four categories of final use, we can say that GDP is the sum of the four components:

GDP = C + I + G + NX

where

C = Consumption Expenditure
I = Investment Expenditure
G = Government Purchases of Goods and Services
NX = Net Export Expenditures

When we obtain Gross Domestic Product from those four components, this is called the "expenditure approach."

Figure 2 is a diagram that shows how GDP and consumption, investment, net exports and government purchases have changed over the last 35 years:

Figure 2. Components of GDP