Krugman's Economics For The Ap® Course
3rd Edition
ISBN: 9781319113278
Author: David Anderson, Margaret Ray
Publisher: Worth Publishers
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Question
Chapter 10, Problem 1CYU
To determine
The question requires us to explain the reason for the same result from three methods of calculating the
Expert Solution & Answer
Explanation of Solution
GDP is the measurement of all final goods and services produced in an economy in a financial year. There are three methods to calculate GDP:
- Income method
- Value-added approach
- Expenditure method
These methods produce the same estimates of GDP because, in an economy as a whole, total spending on goods and services must equal the total income paid by firms in the factor market.
i.e., Total income = Total spending.
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Chapter 10 Solutions
Krugman's Economics For The Ap® Course
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