GDP during a period can be calculated by summing either
A) the purchases of domestically produced final goods and services or the cost incurred in the production of those goods.
B) the amount received by business firms for consumer goods and services or the spending of business firms on investment goods and services.
C) all household expenditures on final goods and services or all business purchases of factors of production.
D) sales of goods and services to foreigners or the purchase of goods and services from foreigners

Question

Quizplus · Accepted Answer

GDP is the market value of all final goods and services produced within a country in a given period of time. Therefore, the calculation of GDP involves summing up not the purchases of all goods and services, but only the purchases of domestic final goods and services, that is, the goods and services that are produced within the country's borders and that are not intermediate inputs into the production process. The alternative answer choices either include too many purchases of intermediate goods and services (B and C) or only include transactions with foreigners and not domestic production (D).

GDP During a Period Can Be Calculated by Summing Either