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4. What are the two different ways of looking at GDP? The (or output) approach adds up all the expenditures used to purchase output approach looks at the value of the income that is derived from from the economy. The producing the economy's output. Either approach can be used in calculating GDP and will produce . the same, different ) answer. This is the expenditure-income identity (E =I

4. What are the two different ways of looking at GDP? The (or output) approach adds up all the expenditures used to purchase output approach looks at the value of the income that is derived from from the economy. The producing the economy's output. Either approach can be used in calculating GDP and will produce . the same, different ) answer. This is the expenditure-income identity (E =I

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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**4. What are the two different ways of looking at GDP?** The ________ (or output) approach adds up all the expenditures used to purchase output from the economy. The ________ approach looks at the value of the income that is derived from producing the economy’s output. Either approach can be used in calculating GDP and will produce (the same, different) answer. This is the expenditure-income identity (E ___= I ___). **Explanation:** This text describes two approaches to calculating Gross Domestic Product (GDP): 1. **Expenditure (or output) Approach**: This method involves summing up all expenditures or spending on goods and services used to purchase output from the economy. 2. **Income Approach**: This approach calculates GDP by evaluating the total income generated by the production of goods and services in the economy. Both methods should theoretically yield the same GDP value, which is emphasized here as the expenditure-income identity \( (E = I) \).
Transcribed Image Text:**4. What are the two different ways of looking at GDP?** The ________ (or output) approach adds up all the expenditures used to purchase output from the economy. The ________ approach looks at the value of the income that is derived from producing the economy’s output. Either approach can be used in calculating GDP and will produce (the same, different) answer. This is the expenditure-income identity (E ___= I ___). **Explanation:** This text describes two approaches to calculating Gross Domestic Product (GDP): 1. **Expenditure (or output) Approach**: This method involves summing up all expenditures or spending on goods and services used to purchase output from the economy. 2. **Income Approach**: This approach calculates GDP by evaluating the total income generated by the production of goods and services in the economy. Both methods should theoretically yield the same GDP value, which is emphasized here as the expenditure-income identity \( (E = I) \).
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National income describes the total value addition, income generation, or expenditure made on domestic output in an economy within a specfiic period of time.

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