One method to measure GDP from the economy of one country is by using the expenditure approach. Through this method, GDP calculated by summing all purchase (expense) toward all goods and service produced during certain period. The calculation with this method can be clarified through the formula:

Y = C + I + G + (X-M)

Y which is the GDP itself, is the measure of aggregate output or the aggregate income.

C (Consumption) is the sum of consumption or purchase done by household to the goods or service. Usually the consumption is the biggest component from GDP

I (investment) is the investment done by private sector that can increase the production capacities from the future economy. Including the investment in the capital tools (like machinery and factory) including the replacement cost and inventories.

G (Government) is the consumption or investment performed by the government.

X-M (Export - Import) is the sum of goods and service exported minus the import. The goal is get the number of domestic production.

(E)