The purchase of a new living room sofa from a major furniture store would be explicitly counted when computing the gross domestic product by the ________ approach.

Question

Quizplus · Accepted Answer

The expenditures approach calculates GDP by adding up all of the spending on final goods and services within an economy. Purchasing a new living room sofa from a major furniture store would be counted as a final good, so it would be explicitly included in the expenditures approach. The income approach looks at the total income generated by producers within the economy, while surplus value is a Marxist concept referring to the difference between the value produced by workers and the wages they are paid. Intermediate products are goods used in the production of other goods and are not counted in GDP. The standard of living is a broader concept that takes into account factors beyond just economic output.

The Purchase of a New Living Room Sofa from a Major