The statement that "GDP values all output equally" means that
A)household production is treated the same as production by firms
B)depreciation of manufactured capital is treated the same as depletion of natural resources
C)the purchase of pollution control equipment is valued the same as the pollution itself
D)leisure time is valued the same as time spent working at a job
E)the market price of output is the measure of that output's value

Question

Quizplus · Accepted Answer

The statement that "GDP values all output equally" means that the market price of output is the measure of that output's value. GDP is calculated by adding up the monetary value of all goods and services produced in an economy, and this is done using market prices. Therefore, GDP values all output equally based on their market prices.

The Statement That "GDP Values All Output Equally" Means That