Are you looking for an answer for the question “which of the following statements about gdp (gross domestic product) is true?” If yes then you are in the right place .Gross domestic product (GDP) is a monetary measure of the market value of all of a country’s final goods and services produced over a given time period.
Which of the following statements about gdp (gross domestic product) is true?
A. The value of household production is excluded from GDP
B. GDP can be calculated using the income approach
C. GDP can be calculated using the expenditures approach
D. All of the above
The statement that is true about GDP is:
D. All of the above
Now lets see why other options are incorrect white The correct answer is option D. All of the above. To understand all other options we have to go through all options one by one so let’s start.
A. The value of household output is excluded from GDP. This is correct, as GDP only measures the market value of goods and services sold on the market. Household production, such as cooking, cleaning, and childcare, is not included in GDP, despite its importance and contribution to well-being.
B. GDP can be calculated using the income method. This is correct, as GDP can be calculated by adding up all of the income earned by a country’s factors of production, such as wages, rents, profits, and interest, over a given period.
C. GDP can be calculated using the expenditures method. This is correct because GDP is calculated by adding up all of a country’s spending on final goods and services, such as consumption, investment, government spending, and net exports, over a given time period.
Lets see
Benefits of using GDP:
● It offers a comprehensive and standardized measurement of an economy’s size and growth.
● It enables policymakers, businesses, and investors to make informed decisions and evaluate policies.
● It partially reflects a country’s population’s living standards and well-being.
Limitations of using GDP:
● It does not account for the quality, distribution, or sustainability of the products and services produced.
● It excludes non-market activities such as household production, volunteer work, and illegal transactions, all of which contribute to the economy.
● It does not assess the environmental, social, or human costs and benefits of economic activity.
Now we hope that we are able to make you understand the answer to the question “which of the following statements about gdp (gross domestic product) is true?” now let’s see some frequently asked question related to our question:
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Some FAQs:
Is inflation affecting real GDP growth?
According to the classical “neutrality of money” view, inflation has little effect on real GDP because it raises both prices and wages in the same way and only changes the units of measurement.
Which is better: nominal GDP or real GDP?
Real GDP is a more reliable indicator of economic growth because it can be compared to base year GDP. Nominal GDP cannot be compared to previous years’ GDP.
What characterizes a strong economy?
Continuing economic strength and resilience are the product of well-designed and well-functioning economic institutions, as well as sound policies such as low taxes, a strong preference for low and stable inflation, restrained regulation, open markets, and federal government spending restraint.
What happens if the GDP decreases?
When GDP falls, the economy contracts, which is bad news for businesses and employees. A recession occurs when GDP falls for two consecutive quarters, which can result in pay freezes and job losses.
