Question

What other questions in addition to "What is GDP and what is the value of the economy's output" must be fully answered to fully understand an economy's performance?

Answer 1

GDP is a monetary measure of the market value of all goods and services.

• It is the indicator used to represent the health of a county's Economy.
• Represents the dollar value of goods and services over a time period.
• Can be measured by three methods:-

1. Out put method:-. This measures the market value of goods and services produced with in the country.
2. Expenditure method:- measures the total Expenditure on goods and services with in the domestic boundaries of a country.

Income method:- It is the total income obtained by the factors of production that in the capital and labour with in the country.

• Economy's total output is equal to the value of goods and services produced in a country.
• It is the quantity of goods or services produced in a given period of time by industryor country.
• The concept of output is essential in the field of macro Economics.
• It is a national output that makes a country rich.
• Out put is the total Economic activity in the production of goods and services in a given period.
• It is a tool used in Economic analysis to determine whether an Economy is growing out put or contracting by comparing out put.
• Economic out put measures the value of all sales of goods and services.
• It is the sum of the final purchases and intermediate inputs resulting in the double counting of purchases.

The values of final goods and services produced can be added directly,or the values added at each stage in the production can be added.