The Gross Domestic Product measures the value of economic activity within a country

The Gross Domestic Product measures the value of economic activity within a country

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The Gross Domestic Product measures the value of economic activity within a country. Strictly defined, GDP is the sum of the market values, or prices, of all final goods and services produced in an economy during a period of time. There are, however, three important distinctions within this seemingly simple definition: 1. GDP is a number that expresses the worth of the output of a country in local currency. 2. GDP tries to capture all final goods and services as long as they are produced within the country, thereby assuring that the final monetary value of everything that is created in a country is represented in the GDP.
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Unformatted text preview: 3. GDP is calculated for a specific period of time, usually a year or a quarter of a year. Taken together, these three aspects of GNP calculation provide a standard basis for the comparison of GDP across both time and distinct national economies. Computing GDP Now that we have an idea of what GDP is, let's go over how to compute it. We know that in an economy, GDP is the monetary value of all final goods and services produced. For example, let's say Country B only produces bananas and backrubs....
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This note was uploaded on 12/13/2011 for the course ECO 1310 taught by Professor Staff during the Fall '10 term at Texas State.

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