A country's gross domestic product for a given time period is the total market value of _____.(1 point)
Responses
all goods and service produced within the country's borders
all goods and service produced within the country's borders
all finished goods and services produced by the country's residents
all finished goods and services produced by the country's residents
all goods and services produced by the country's residents
all goods and services produced by the country's residents
all finished goods and services produced within the country's borders
all finished goods and services produced within the country's borders
all goods and service produced within the country's borders
The correct answer is "all finished goods and services produced within the country's borders."
To determine a country's gross domestic product (GDP), you need to calculate the total market value of all finished goods and services produced within the country's borders during a specific time period, usually a year.
To calculate the GDP, you can use one of the following approaches:
1. Expenditure approach: This approach calculates GDP by summing up all the spending on goods and services within the economy. It includes consumption expenditure by households (such as buying groceries or going to a restaurant), investment expenditure by businesses (such as buying machinery or constructing buildings), government spending (such as infrastructure projects or public services), and net exports (exports minus imports).
2. Income approach: This approach calculates GDP by summing up all the incomes earned within the economy. It includes wages and salaries earned by workers, profits earned by businesses, rents earned by property owners, and interest earned by lenders.
Both approaches should yield the same GDP value because they are measuring the same economic activity from different angles.
Remember, GDP only includes finished goods and services, meaning they have undergone their final production stage and are intended for consumption or investment. It does not include intermediate goods or services, which are used in the production process.