Process to calculate gross domestic product, Macroeconomics

Assignment Help:

process to calculate gross domestic product

We just include finished goods and services - which is, anything that is sold directly to consumer. Electric power sold to a steel mill isn't included while all the electric power sold directly to consumers is included. Reason is simply that we want to avoid "double counting". Consider for illustration the production of cars. Car producers have parts produced by other firms which in turn have parts delivered by other firms and so on. If we were to count value of everything produced by a firm, then most parts of a car will be counted several times. This is why only the value of finished car is used in calculation of GDP. Note, though, that if a firm buys a robot which it uses in production of cars, then this robot is counted (if it's produced in the same country). Car producer is then "final consumer" of the robot - no value is added to it and it is not resold to another firm.

 


Related Discussions:- Process to calculate gross domestic product

Supply and Demand, During the 1990s, technological advance reduced the cost...

During the 1990s, technological advance reduced the cost of computer chips. Explain, with the use supply and demand diagrams, how the following markets are affected in terms of pr

Calculate the production with antitrust laws, The following Table summarize...

The following Table summarizes the profits of two firms as a function of their capacity investments levels (you can also interpret these levels as the quantities they produce):

Explain consumer price index, Q. Explain Consumer Price Index? CPI is a...

Q. Explain Consumer Price Index? CPI is a price index of a particular basket known as the CPI-basket. CPI-basket comprise essentially all the servicesand goods consumed in a co

Monetrary policy, draw a diagram that explains how interest rate sare deter...

draw a diagram that explains how interest rate sare determined in the keynesian macroeconomic model

What is loanable funds market, Construct loanable funds market in the conte...

Construct loanable funds market in the context of an open economy assuming that the home country is a small open economy. Discuss the effect of an enhance in the govt. expendi

Average cholesterol level, In a sample of 80 people who have had strokes, t...

In a sample of 80 people who have had strokes, the average cholesterol level was 250 with a standard deviation of 70. In order to test the hypothesis (at the 5% level of significan

Described as a market in equilibrium, Camping at Wilson's Promontory, a nat...

Camping at Wilson's Promontory, a national park in Victoria, isn't free, but for many years now not everyone who wants to camp at Wilson's Promontory during the Christmas holidays

Changes in price promotion, An end-of-aisle price promotion changes the pri...

An end-of-aisle price promotion changes the price elasticity of a good from -2 to -3. If the normal price is $10, what should the promotional price be?

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd