Explain the expenditure method of measuring national income.

Expenditure Method. Expenditure method measures final expenditure on 'Gross Domestic Product at market price (GDP at MP)' during a period of account. Since all domestically produced goods and services are purchased for final use either by consumers for consumption or by producers for investment, therefore we take sum of final expenditure on consumption and investment. This sum equals GDP at MP. Under expenditure method national income is calculated first by adding up all the items of final consumption expenditure and final investment expenditure within domestic economy during a year. The resulting total is called GDP at MP. Then by subtracting depreciation and net indirect taxes from GDP at MP and adding to it net factor income from abroad, we get NNP at FC or national income. Thus in expenditure method, national income is measured at the point of actual expenditure by various economic units.