EBK MACROECONOMICS
4th Edition
ISBN: 9781319117016
Author: KRUGMAN
Publisher: Worth Publishers
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Question
Chapter 7, Problem 4P
To determine
Concept introduction:
The formula to calculate the value of GDP is,
Here,
- C is consumption spending.
- I is investment spending.
- G is government purchases.
- X is export.
- M is import.
Value Added Method: In this method of measuring GDP, the summation of final value of different sector of the economy, that is primary sector, secondary sector and tertiary sector, gives the real GDP of the economy.
The formula to calculate the GDP as value added in production,
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