What Are the Four Components of GDP?

What Are the Four Components of GDP?

What Are the Four Components of GDP?

The components of Gross Domestic Product (GDP) are personal consumption expenditures, business investment, government spending and net exports of goods and services. GDP describes what a country's economy produces.

Personal consumption expenditures are divided into goods and services. They account for nearly 70 percent of what the United States produces, as of 2014. Business investment includes purchases that companies make to produce consumer goods. However, not every purchase is counted. Government spending is what the government contributes to the economy. Military spending accounts for much of that amount. Imports and exports have opposite effects on GDP. Exports add to GDP, while imports subtract from GDP.