In order to measure gross domestic product, we can follow a. three approaches: the expenditure approach, the income approach, and the market-based approach. b. only one approach: the circular flow approach. c. only one approach: the national accounts approach. d. two approaches: the expenditure approach and the income approach. e. three approaches: the expenditure approach, the income approach, and the production approach.

Question

Business

Twig

27 January, 00:23

In order to measure gross domestic product, we can follow a. three approaches: the expenditure approach, the income approach, and the market-based approach. b. only one approach: the circular flow approach. c. only one approach: the national accounts approach. d. two approaches: the expenditure approach and the income approach. e. three approaches: the expenditure approach, the income approach, and the production approach.

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George Vaughn · Answer 1

The correct answer is E.

Explanation:

Gross Domestic Product (GDP) is the total monetary or market value of all the finished goods and services produced within a country's borders in a specific time period. It is an indicator to measure the economic health of a country. Most of the individual data sets will also be given in real terms, meaning that the data is adjusted for price changes, and is, therefore, net of inflation.

GDP can be determined via three methods. All, when correctly calculated, should generate the same figure. These three approaches are often termed the expenditure approach, the output (or production) approach, and the income approach.