Lesson 3 - GDP

Question 1

Define GDP

Answer 1

The market value of all final goods and services prouced domestically in a time period

Question 2

What is the market value of a product?

Answer 2

The price paid by customers (less VAT)

Question 3

What does GDP count?

Answer 3

The value of finished goods

Question 4

Why does GDP only count the value of finished goods?

Answer 4

To avoid double counting

Question 5

What are the three ways that GDP can be measured?

Answer 5

Output measure
Expenditure measure
Income measure

Question 6

What is output measure?

Answer 6

The value of the goods and services produced by all sectors of the economy, agriculture, manufacturing, energy, construction, the service sector and the government

Question 7

What is expenditure measure?

Answer 7

The value of all goods and services purchased by households and by government, investment in machinery and buildings. It also includes the value of exports minus imports.

Question 8

What is income measure?

Answer 8

The value of the income generated mostly in terms of profits and wages.

Question 9

What is formula for measuring GDP?

Answer 9

C+I+G+X-M