Calculate the total private and public consumption, or consumer spending, in a country's economy during a given time period, such as a year, by adding together all durable and non-durable goods and services expenditures made during that year.
Determine the country's total government spending during that year by subtracting the total amount of government transfer payments, such as welfare and unemployment payments, from the total amount of government purchases made that year.
Calculate the total amount of investments made in the country during that year by calculating the sum of all the country's business spending on capital that year.
Determine the country's net exports for that year by subtracting the total amount of imports from the total amount of exports. Imports are not included since GDP is a measure of a country's economic output only.
Calculate the country's GDP for that year by adding total consumption (C), government spending (G), investment (I) and net exports (NX). Thus, the equation for calculating GDP is as follows: GDP = C + G + I + NX.