A2) Economics We can define GDP as value of all goods and services produced in an economy. But directly above we calculate GDP by adding up the value of all goods and services purchased in an economy. By calculating GDP in this way we must assume that everything produced is also purchased. While it seems obvious that not everything produced is always purchased in a given year, how can we explain the difference in the way we define GDP and how we calculate it. (i.e. how do we explain how everything purchased can actually be equal to everything produced)
A2) Economics We can define GDP as value of all goods and services produced in an economy. But directly above we calculate GDP by adding up the value of all goods and services purchased in an economy. By calculating GDP in this way we must assume that everything produced is also purchased. While it seems obvious that not everything produced is always purchased in a given year, how can we explain the difference in the way we define GDP and how we calculate it. (i.e. how do we explain how everything purchased can actually be equal to everything produced)
Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter7: Macroeconomic Measurements, Part Ii: Gdp And Real Gdp
Section: Chapter Questions
Problem 9WNG
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A2)
Economics
We can define GDP as value of all goods and services produced in an economy. But directly above we calculate GDP by adding up the value of all goods and services purchased in an economy.
By calculating GDP in this way we must assume that everything produced is also purchased. While it seems obvious that not everything produced is always purchased in a given year, how can we explain the difference in the way we define GDP and how we calculate it. (i.e. how do we explain how everything purchased can actually be equal to everything produced)
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