Describe briefly expenditure method.

Explanation

Expenditure method measures natonal income as the aggregate of all the final expenditure incurred in an economy, during a year.
The main components of final expenditures are :
(a) Private final consumption expenditure refers to expenditure on the purchase of goods and services by households and private non-profit institutions serving households.
(b) Government final consumption expenditure is the expenditure incurred by general government on various administrative services, e.g., law and order, defence etc.
(c) Gross Domestic capital formation refers to the addition to the existing capital stock of the economy. It is Gross Domestic fixed capital formation with change in stock.
(d) Net exports is the difference between value of exports and imports of a country, during the period of one year.
`N NP_(FC)=a+b+c+d-"Dep."+NFIA-NIT`