Macroeconomics
Macroeconomics
10th Edition
ISBN: 9780134896441
Author: ABEL, Andrew B., BERNANKE, Ben, CROUSHORE, Dean Darrell
Publisher: PEARSON
Question
Book Icon
Chapter 2, Problem 1RQ
To determine

The three approaches used commonly in measuring the performance of an economy together with the reason behind each providing the same answer.

Expert Solution & Answer
Check Mark

Explanation of Solution

The gross domestic product is the monetary value of all final goods produced within the boundaries of a country during a specific period.

It could be calculated using three main approaches.

They are the production approach, the expenditure approach, and the income approach.

When calculated using any of these approaches, the GDP value will be the same.

They are being designed in a way that an entry made in one approach creates a counter entry of the same value in the other two approaches.

For example, if 100 metric tons of rice is being produced and sold by an economy, the production of it would be recorded under the production approach, its sale would be recorded under the expenditure approach, and the funds raised by its sale would fall under the income approach.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
Define Economic events.
What do economists use to make decisions about economic matters?a) a decision gridb) The Farmer's Almanacc) the IRS tax manuald) The mean of the GDP and the lagging economic indicators Please dont use any ai tool.
Define Three Major Uses of Econometrics?
Knowledge Booster
Background pattern image
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Microeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Text book image
Macroeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Text book image
Economics: Private and Public Choice (MindTap Cou...
Economics
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Text book image
Essentials of Economics (MindTap Course List)
Economics
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Text book image
Brief Principles of Macroeconomics (MindTap Cours...
Economics
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Text book image
Economics Today and Tomorrow, Student Edition
Economics
ISBN:9780078747663
Author:McGraw-Hill
Publisher:Glencoe/McGraw-Hill School Pub Co