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Typically, GDP is calculated by adding up all expenditures in the economy. Arrange the following components in the decreasing order in terms of their contribution to India’s annual GDP.
  1. Private Final Consumption Expenditure (PFCE).
  2. Government Final Consumption Expenditure (GFCE)
  3. Gross Fixed Capital Formation (GFCF)
  4. Net exports
Select the correct answer code:
  • a)
    1-2-3-4 
  • b)
    3-1-2-4 
  • c)
    1-3-2-4 
  • d)
    1-3-4-2
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
Typically, GDP is calculated by adding up all expenditures in the econ...
's GDP:

1. Consumption expenditure by households
2. Gross fixed capital formation (investment)
3. Government expenditure on goods and services
4. Net exports (exports minus imports)

The correct order is:

1. Consumption expenditure by households
2. Gross fixed capital formation (investment)
3. Government expenditure on goods and services
4. Net exports (exports minus imports)
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Community Answer
Typically, GDP is calculated by adding up all expenditures in the econ...
Typically, GDP is calculated by adding up all expenditures in the economy. These expenditures are broadly categorised in four groups:
  • All the money Indians spend in their personal capacity— from buying an ice cream to watching a movie to buying a TV or car. This is called thePFCE. Such expenditures account for 55%-60% of India’s annual GDP.
  • All the money thegovernments spendon their daily uses — paying salaries etc. This is called Government Final Consumption Expenditure (GFCE) and this accounts for 10% of India’s GDP.
  • All the money spent by private companies and governments towards building productive capacitiesin the economy. Say a firm buying desktops for its employees or the government spending money on building a road. This is called the Gross Fixed Capital Formation (GFCF)and this accounts for 30%-32% of the GDP.
  • Net exportsor the net of all the money that Indians received by exporting goods and services and minus all the money they spent on importing goods and services. More often than not, India’s imports are more than its exports. As such the Net Exports component is negative and drags down overall GDP.
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Typically, GDP is calculated by adding up all expenditures in the economy. Arrange the following components in the decreasing order in terms of their contribution to India’s annual GDP. Private Final Consumption Expenditure (PFCE). Government Final Consumption Expenditure (GFCE) Gross Fixed Capital Formation (GFCF) Net exportsSelect the correct answer code:a)1-2-3-4b)3-1-2-4c)1-3-2-4d)1-3-4-2Correct answer is option 'C'. Can you explain this answer?
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Typically, GDP is calculated by adding up all expenditures in the economy. Arrange the following components in the decreasing order in terms of their contribution to India’s annual GDP. Private Final Consumption Expenditure (PFCE). Government Final Consumption Expenditure (GFCE) Gross Fixed Capital Formation (GFCF) Net exportsSelect the correct answer code:a)1-2-3-4b)3-1-2-4c)1-3-2-4d)1-3-4-2Correct answer is option 'C'. Can you explain this answer? for UPSC 2025 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Typically, GDP is calculated by adding up all expenditures in the economy. Arrange the following components in the decreasing order in terms of their contribution to India’s annual GDP. Private Final Consumption Expenditure (PFCE). Government Final Consumption Expenditure (GFCE) Gross Fixed Capital Formation (GFCF) Net exportsSelect the correct answer code:a)1-2-3-4b)3-1-2-4c)1-3-2-4d)1-3-4-2Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for UPSC 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Typically, GDP is calculated by adding up all expenditures in the economy. Arrange the following components in the decreasing order in terms of their contribution to India’s annual GDP. Private Final Consumption Expenditure (PFCE). Government Final Consumption Expenditure (GFCE) Gross Fixed Capital Formation (GFCF) Net exportsSelect the correct answer code:a)1-2-3-4b)3-1-2-4c)1-3-2-4d)1-3-4-2Correct answer is option 'C'. Can you explain this answer?.
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