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In year 1 they produce 5 bananas that are worth

# In year 1 they produce 5 bananas that are worth - \$...

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In year 1 they produce 5 bananas that are worth \$1 each and 5 backrubs that are worth  \$6 each. The GDP for the country in this year equals (quantity of bananas X price of  bananas) + (quantity of backrubs X price of backrubs) or (5 X \$1) + (5 X \$6) = \$35. As  more goods and services are produced, the equation lengthens. In general, GDP =  (quantity of A X price of A) + (quantity of B X price of B) + (quantity of whatever X price  of whatever) for every good and service produced within the country.  In the real world, the market values of many goods and services must be calculated to  determine GDP. While the total output of GDP is important, the breakdown of this output  into the large structures of the economy can often be just as important. In general,

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In year 1 they produce 5 bananas that are worth - \$...

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