For an economy with only two goods,skate boards can be added to bicycles to compute the GDP by

Question

Quizplus · Accepted Answer

To compute the GDP, we need to take the output of each good (in units) and multiply it by its price in dollars. Then we add up the resulting dollar values to obtain the GDP. Therefore, choice A is the correct choice. Choice B is incorrect because we do not divide output by price. Choice C is incorrect because we should multiply output by price, not the other way around. Choice D is incorrect because we should not divide dollar values of output by price, but rather multiply output by price to obtain dollar values.

For an Economy with Only Two Goods,skate Boards Can Be