ECONOMICS
GDP
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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you buy a new pair of jeans
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The government spends $70 million on medicare
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you give 50 cents to a homeless person
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A German company buys $5 million worth of airplanes that were produced in the United States.
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Detailed explanation-1: -GDP is the way we measure the U.S. economy and its growth. GDP = the total market value of the goods and services produced within the United States in a year. A good is a video game, a car, an apple, a gold ring.
Detailed explanation-2: -The four components of gross domestic product are personal consumption, business investment, government spending, and net exports. 1 That tells you what a country is good at producing. GDP is the country’s total economic output for each year.
Detailed explanation-3: -This generally happens because the value of intermediate goods has been taken into account along with the value of the final goods that the intermediate goods were used for. For example, there will be double counting if the value of tires used in cars is included in the GDP and so is the final value of the car.
Detailed explanation-4: -Gross domestic product measures two things at once: (1) the total income of everyone in the economy and (2) the total expenditure on the economy’s output of final goods and services. It can measure both of these things at once because all expenditure in the economy ends up as someone’s income.