2011-02-15_203205_tool_gdp (1)

2011-02-15_203205_tool_gdp (1) - The gross domestic...

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The gross domestic product (GDP) of a country is generally determined by the amount of value of all the goods and services that have been produced in that country for a period of time. The GDP is usually associated with the standard of living in that country, but it not always need be. GDP can be determined in three ways, all of which should basically give the same answer. They are the product (or output) approach, the income approach, and the expenditure approach. The most direct of the three is the product approach, which sums the outputs of every class of enterprise to arrive at the total. The expenditure approach works on the principle that all of the product must be bought by somebody, therefore the value of the total product must be equal to people's total expenditures in buying things. The income approach works on the principle that the incomes of the productive factors ("producers,") must be equal to the value of their product, and determines GDP by finding the sum of all producers' incomes (World Bank, 2009).
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This note was uploaded on 04/01/2012 for the course ECON 101 taught by Professor Doc during the Spring '11 term at Yale.

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2011-02-15_203205_tool_gdp (1) - The gross domestic...

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