According to the circular-flow diagram, GDP can be computed as
A)either the revenue firms receive from the sales of goods and services or the payments they make to factors of production.
B)the revenue firms receive from the sales of goods and services but not as the payments they make to factors of production.
C)payments firms make to factors of production but not as revenues they receive from the sales of goods and services.
D)neither the revenue firms receive nor the payments they make to factors of production.

Question

Quizplus · Accepted Answer

GDP can be computed as either the total revenue firms receive from the sales of goods and services or the total payments they make to factors of production, as both approaches should yield the same total value in the circular-flow diagram.

According to the Circular-Flow Diagram, GDP Can Be Computed as