The product approach to calculating GDP
A)adds together the market values of final goods and services produced by domestic and foreign-owned factors of production within the nation in some time period.
B)includes the market value of goods and services produced by households for their own consumption but excludes the value of the underground economy.
C)is superior to the income approach because, unlike the income approach, it gives us the real value of output.
D)adds together the market values of final goods, intermediate goods, and goods added to inventories.

Question

Quizplus · Accepted Answer

The product approach to calculating GDP adds together the market values of final goods and services produced by domestic and foreign-owned factors of production within the nation in some time period. This approach focuses on the output produced in the economy rather than the incomes earned by factors of production, making it a better measure of economic activity than the income approach.

The Product Approach to Calculating GDP