What are the main components of GDP?

The correct answer identifies the primary components of Gross Domestic Product (GDP) based on the expenditure approach, which is a widely used method to measure GDP. This approach breaks down the total GDP into four main categories: consumption, investment, government spending, and net exports.

Consumption refers to the total spending by households on goods and services, representing a significant portion of GDP in most economies. Investment encompasses business investments in capital goods such as machinery and buildings, as well as residential construction. Government spending includes all government expenditures on goods and services that contribute to the overall economy, excluding transfer payments like pensions. Finally, net exports are calculated as total exports minus total imports, indicating the balance of trade impact on the economy.

The other options do not accurately represent the main components of GDP as defined by the expenditure approach. While they may include important economic factors or inputs, they do not collectively account for GDP as defined in macroeconomic theory. Therefore, understanding this breakdown is essential for analyzing economic performance and policy implications.