What is included in Gross National Expenditure (GNE)?

The correct answer encompasses a comprehensive view of national economic activity and includes the total spending on final goods and services within a country over a specific period. Gross National Expenditure (GNE) is defined as the sum of consumption (household spending on goods and services), investment (business expenditures on capital goods), government spending (government consumption and investment), and net exports (exports minus imports).

By aggregating these components, GNE provides a complete picture of economic activity, reflecting how resources are allocated in the economy. This metric is crucial because it indicates the overall demand for goods and services, which drives economic growth. Thus, including the various forms of expenditure ensures that GNE captures the multifaceted nature of economic transactions that contribute to a nation’s economic performance.