PRINCIPLES OF MACROECONOMICS (LL)W/ACC.
7th Edition
ISBN: 9781264088980
Author: Frank
Publisher: MCG
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Chapter 5, Problem 1RQ
To determine
Use of market value while calculating
Expert Solution & Answer
Explanation of Solution
The gross domestic product is the summation of the market value of all the final goods and services produced within the economy in a financial year. There will be a wide variety of goods and services produced in the economy such as apples, oranges, grapes, automobiles, electronic items and so on. Thus, adding them together will be an impossible task. This issue is handled through the use of aggregating the market values of each goods. This helps to aggregate the value and calculate the GDP value of the economy. This is the reason why the economists use the market values to calculate the GDP.
The weight giving process for the high valued commodities than the low valued commodities is because of the fact of the consumer preferences. The
Economics Concept Introduction
Gross Domestic Product: The Gross Domestic Product (GDP) is the sum total of the money value of all the final goods and services produced within the economy in a given period of time, which is usually a financial year.
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Chapter 5 Solutions
PRINCIPLES OF MACROECONOMICS (LL)W/ACC.
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