Domestic Spending and four components of Real GDP

Domestic Spending:

Real GDP has four components:

1. Consumption spending (C)

2. Investment spending (I)

3. Government purchases (G)

4. Net exports, the balancing item (NX).

These four components add up to national income that according to the circular-flow principles is the similar as real GDP, Y:

C + I + G + NX = Y

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