discuss the various steps of expenditure …

Following are the components of the Expenditure Method that are used to calculate national income:

1. Private Final Consumption Expenditure- Private final consumption expenditure includes the money value of consumer goods and services purchased by households and non-profit institutions for current use.
2. Government Final Consumption Expenditure- It refers to expenditure on final goods and services by the government, like expenditure on the purchase of goods for consumption by the defence personnel.
3. Investment Expenditure- Investment means an addition to the stock of capital goods and inventory. Investment may be of the following four types:
   1. Business fixed investment
   2. Inventory investment
   3. Public investment
   4. Residential construction investment.
4. Net Exports- Net exports means the difference between exports and imports.