Alright. So here we have a calculation of the GDP for the United States in 2009 based on the expenditures approach on the left and the income approach on the right. Notice that at the bottom, we reach the same final number, 14,256, and that was the GDP during that year. Now, this is in billions. We're talking about in billions, so we're going to add a whole bunch of zeros after that. We're talking about nine zeros after all of these numbers, but let's go ahead and go through each one. Notice on the left, we're going through our expenditures approach. We start with consumption which is the biggest part of expenditures, is consumption. Then we add investment, gross government purchases, c+i+g + net exports. And notice for the United States, it's negative. Right? And why is it negative? Because imports exceed exports. We are running a trade deficit, so we're going to have a negative number there, and remember net exports is just exports minus imports. So if those imports are bigger, we're going to have a negative number there. Okay? So we have a trade deficit because we import more stuff than we export. So we just add those four numbers and we get to our gross domestic product.
There we go. 14,256. Let me get out of the way here. Let's look at the income approach on the right. So the first thing we want to do is calculate national income like we talked about on the previous page. We're going to add up all the compensation. So remember, compensation of employees, that's the biggest portion here. Notice how it's the biggest one. And then we add everything else. We've got the rents, the interest, proprietor income, corporate profit, and taxes on production and imports. That gets us to total national income and then we make our adjustments. We've got our foreign factor income, our consumption of fixed capital, our depreciation there, and finally, our statistical discrepancy. Hey, we made a we got to make these things equal out. So let's go ahead and use 209. Let's plug that in there so that everything works and looks pretty here. 1,400,256 equals 1,400,256. The main equals 1,400,256. The main takeaway, remember, expenditures equal income.
Okay, that's the idea here, that expenditures are going to equal income. Now, like I said at the beginning of the video, you're not going to have to spend too much time on the income approach. Generally, you're going to focus on the expenditure approach and focus on this consumption plus investment plus government purchase plus net export throughout this course. Okay? Now, some teachers like to go through this and compare the two, but that's because the main takeaway here is that those expenditures equal income. Cool? Alright. Let's go ahead and move on to the next topic.