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This indicates that Japan primarily uses the expenditure approach while calculating its GDP: Exports and consumer expenditure are variables of the expenditure approach. Furthermore, the article goes on to mention analysts’ argument that capital spending of Japan’s largest companies were on the rise during the last three months of 2004. Investment expenditures are another aspect which has to be taken into account while calculating GDP by the expenditure approach.
The main reason why Japan’s strong economic growth before the 1990’s gave way to moderate growth over the past decade with periodical recessions is mainly due to lack of consumer spending to enable further economic growth...
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