Which formula accurately represents the calculation of GDP?

The formula that accurately represents the calculation of GDP is GDP = Consumption + Government Spending + Investment + Net Exports. This formula encapsulates all the major components that contribute to a nation's gross domestic product.

Consumption refers to the total value of all goods and services consumed by households. Government Spending includes expenditures on goods and services that government consumes for providing public services. Investment represents the spending on capital goods that will be used for future production. Net Exports, which is calculated by subtracting imports from exports, shows the balance of trade and represents the value of goods and services produced domestically and sold abroad minus those produced abroad and sold domestically.

By including all these components, the formula provides a comprehensive picture of economic activity within a country, reflecting the total demand for goods and services in the economy. This holistic approach is essential for accurately measuring the economic output of a nation.