Explain the two different ways of looking at GDP
What will be an ideal response?
There are the expenditure approach and the income approach to looking at GDP. The expenditures approach adds up all the expenditures used to purchase output from the economy by the consumer, businesses, government, and foreigners. The income approach looks at the value of the income that is derived from producing the economy’s output such as wages, rents, interest, and profits. Either approach can be used in calculating GDP and will produce the same answer.
You might also like to view...
Suppose that there are only three consumers of a product. At a price of $6 per unit, the first consumer would buy 12 units of the product, the second consumer would buy 8 units, and the third consumer would buy 3 units of the product
If you drew a market demand curve for this product, the quantity demanded at a price of $6 would be A) 23 units. B) 20 units. C) 12 units. D) 11 units.
When perfectly competitive firms are earning zero accounting profits, a. we would expect entry into the industry
b. we would expect stability in the industry, since it is in long run equilibrium. c. we would expect exit from the industry. d. we would expect none of the above.