The total volume of sales in an economy is much larger than the value of GDP because:
A) GDP understates the value of total output.
B) the output approach to measuring GDP excludes intermediate transactions.
C) GDP includes transfer payments.
D) total sales include sales to foreign countries but GDP excludes sale of output to foreign countries.

Question

Quizplus · Accepted Answer

GDP measures the value of final goods and services, excluding intermediate transactions to avoid double counting, whereas total sales include all transactions, including intermediate sales.

The Total Volume of Sales in an Economy Is Much