In the TE-TP framework,total production
A) always equals total expenditures.
B) equals Real GDP.
C) is always greater than total expenditures.
D) is always less than total expenditures.

Question

Quizplus · Accepted Answer

In the TE-TP framework, total production refers to the total value of all goods and services produced within an economy in a given time period. This value is measured by Real GDP (Gross Domestic Product), which includes both goods and services produced within the country's borders. Therefore, option B is correct. Option A is incorrect because total expenditures also include the value of intermediate goods, which are not counted in total production. Option C and D are incorrect because it is possible for total production to be equal, greater or less than total expenditures, depending on various factors such as the level of inventory investment, net exports, etc.

In the TE-TP Framework,total Production