Gross Domestic Product (GDP) is one of the measures of economic growth for a country’s economy
It is measured in terms of the monetary value of all goods and services produced within the borders of a country during a year.
GDP (for any year) can be defined in three ways, all of which are conceptually identical
1. It is equal to the sum of the value added at every stage of production (any intermediate stages) by all the industries within a country, plus taxes subsidies on products
2. It is equal to the total expenditures for all final goods and services produced within the country
3. It is equal to the sum of the income generated by production in the country.
GDP refers to the final value of all goods and services produced in an economy.
How is the GDP of an Economy Measured?
There are three official methods to measure GDP
1. Output Method
2. Income Method
3. Expenditure Method
Output of goods and services leads to income for those who are producing, as well as expenditure for those who are consuming the items. Hence, the value of GDP measured by any of the three methods is exactly the same. (However, this is not always the case due to discrepancies, errors and omissions in the counting)
Measurement of GDP using any of the three methods yields the same value
It is measured in terms of the monetary value of all goods and services produced within the borders of a country during a year.
GDP (for any year) can be defined in three ways, all of which are conceptually identical
1. It is equal to the sum of the value added at every stage of production (any intermediate stages) by all the industries within a country, plus taxes subsidies on products
2. It is equal to the total expenditures for all final goods and services produced within the country
3. It is equal to the sum of the income generated by production in the country.
GDP refers to the final value of all goods and services produced in an economy.
How is the GDP of an Economy Measured?
There are three official methods to measure GDP
1. Output Method
2. Income Method
3. Expenditure Method
Output of goods and services leads to income for those who are producing, as well as expenditure for those who are consuming the items. Hence, the value of GDP measured by any of the three methods is exactly the same. (However, this is not always the case due to discrepancies, errors and omissions in the counting)
Measurement of GDP using any of the three methods yields the same value
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