Question

Which of the following best describes GDP (Gross Domestic Product)?

• A. Total value of all final goods and services produced within a country's borders
• B. The income earned by all citizens of a country, including those living abroad.
• C. The total value of exports minus the total value of imports.
• D. The amount of money the government collects in taxes.

Answer 1

Answer:

A. Total value of all final goods and services produced within a country's borders

Gross Domestic Product(GDP)

1. It measures the total economic output within a country's geographical boundaries

2. It only counts final goods and services (not intermediate goods) to avoid double counting

3. It focuses on production within the country's borders, regardless of who owns the means of production

4. It's different from GNP (Gross National Product) which includes income earned by citizens abroad