To calculate GDP it is necessary to
A)add the total amounts of all the goods produced.
B)use the market price to place a dollar value on each good produced.
C)use production cost to place a dollar value on all goods produced.
D)use the average market price over the last five years to place a dollar value on all goods produced.
E)average the cost of producing a good with the price of the good to place a dollar value on all goods produced.

Question

Quizplus · Accepted Answer

To calculate GDP, we need to use the market price of each good and service produced. This means we value goods and services based on what they sell for in the market, rather than the cost of production or any historic prices. This ensures that we are measuring the true value of a country's output in its current state.

To Calculate GDP It Is Necessary to