GDP is calculated by taking the output of each final good and service produced in an economy within a year and weighting it by its price in that year, then summing these values. This approach captures the market value of all final goods and services produced, avoiding double counting that would occur if intermediate goods were included.

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To Calculate GDP

Question 39

Multiple Choice

To calculate GDP:

A) add the quantity of all final goods and services produced in an economy in a year.
B) add the quantity of all goods and services sold in an economy in a year.
C) weight the output of each final good and service produced in an economy in a year by its price in that year and then total the result.
D) weight the output of each good and service produced in an economy in a year by its price in that year and then total the result.

Correct Answer: