Measuring GDP Questions With
Correct And Verified Answers
What vare vthe vthree vapproaches vto vmeasuring vGDP? v- vCORRECT✅✅- vproduct
vapproach
- vexpenditure vapproach
- vincome vapproach
Explain vthe vconcept vof vvalue vadded v- vCORRECT✅✅Value vadded vis vthe vincrease
vin vthe vvalue vof vgoods vas va vresult vof vthe vproduction vprocess. vValue vadded v=
vvalue vof vproduction v- vvalue vof vintermediate vgoods
Calculate vthe vadded vvalue vin veach vfirm vand vthe vGDP vof vthis veconomy
F1 v= v90
F2 v= v200 v- v90 v= v110
F3 v= v220 v- v100 v= v120 v- vCORRECT✅✅Hence vGDP v= v320
Calculate vthe vincome vreceived vby veach vhousehold vand vthe vtotal vexpenditure vin
vgoods vin vthis veconomy. v- vCORRECT✅✅Profits v= v(90 v- v50) v+ v(200 v- v90 v- v50) v+
v(220 v- v100 v- v50)
Wages v= v50 vx v3 v= v150
Total vIncome v= vGDP v= v320
Total vExpenditure: vConsumption v= v100 v+ v220 v= v320 v= vGDP
Determine vGDP vin vthis veconomy vduring vthis vyear vusing vthe vproduct vand
vexpenditure vapproaches v- vCORRECT✅✅The vwheat vproducer vhas vnot
vintermediate vinputs vand vproduces v30 vmillion vbushels vat v$3/ vbu. vfor v$90 vmillion.
vThe vbread vproducer vproduces v100 vmillion vloaves vat v$3.50/loaf vfor v$350 vmillion.
vThe vbread vproducer vuses v$75 vmillion vworth vof vwheat vas van vinput. vTherefore, vthe
vbread vproducer's vvalue vadded vis v$275 vmillion. vTotal vGDP vis vtherefore v$90 vmillion
v+ v$275 vmillion v= v$365 vmillion.
Expenditure vaccounting vadds vup vto vthe vvalue vof vexpenditures von vfinal voutput.
vConsumers vbuy v100 vmillion vloaves vat v$3.50/ vloaf vfor v$350 vmillion. vThe vwheat
vproducer vadds v5 vmillion vbushels vof vwheat vto vinventory. vTherefore, vinvestment
vspending vis vequal vto v5 vmillion vbushels vof vwheat vvalued vat v$3/ vbu., vwhich vcosts
v$15 vmillion. vTotal vGDP vis vtherefore v$350 vmillion v+ v$15 vmillion v= v$365 vmillion.
the vproduct vapproach vexample v- vCORRECT✅✅Firm vA vproduces v50,000 vbushels
vof vwheat, vwith vno vintermediate vgoods vinputs.
At v$3/bu., vthe vvalue vof vFirm vA's vproduction vis vequal vto v$150,000. vFirm vB
vproduces v50,000
Correct And Verified Answers
What vare vthe vthree vapproaches vto vmeasuring vGDP? v- vCORRECT✅✅- vproduct
vapproach
- vexpenditure vapproach
- vincome vapproach
Explain vthe vconcept vof vvalue vadded v- vCORRECT✅✅Value vadded vis vthe vincrease
vin vthe vvalue vof vgoods vas va vresult vof vthe vproduction vprocess. vValue vadded v=
vvalue vof vproduction v- vvalue vof vintermediate vgoods
Calculate vthe vadded vvalue vin veach vfirm vand vthe vGDP vof vthis veconomy
F1 v= v90
F2 v= v200 v- v90 v= v110
F3 v= v220 v- v100 v= v120 v- vCORRECT✅✅Hence vGDP v= v320
Calculate vthe vincome vreceived vby veach vhousehold vand vthe vtotal vexpenditure vin
vgoods vin vthis veconomy. v- vCORRECT✅✅Profits v= v(90 v- v50) v+ v(200 v- v90 v- v50) v+
v(220 v- v100 v- v50)
Wages v= v50 vx v3 v= v150
Total vIncome v= vGDP v= v320
Total vExpenditure: vConsumption v= v100 v+ v220 v= v320 v= vGDP
Determine vGDP vin vthis veconomy vduring vthis vyear vusing vthe vproduct vand
vexpenditure vapproaches v- vCORRECT✅✅The vwheat vproducer vhas vnot
vintermediate vinputs vand vproduces v30 vmillion vbushels vat v$3/ vbu. vfor v$90 vmillion.
vThe vbread vproducer vproduces v100 vmillion vloaves vat v$3.50/loaf vfor v$350 vmillion.
vThe vbread vproducer vuses v$75 vmillion vworth vof vwheat vas van vinput. vTherefore, vthe
vbread vproducer's vvalue vadded vis v$275 vmillion. vTotal vGDP vis vtherefore v$90 vmillion
v+ v$275 vmillion v= v$365 vmillion.
Expenditure vaccounting vadds vup vto vthe vvalue vof vexpenditures von vfinal voutput.
vConsumers vbuy v100 vmillion vloaves vat v$3.50/ vloaf vfor v$350 vmillion. vThe vwheat
vproducer vadds v5 vmillion vbushels vof vwheat vto vinventory. vTherefore, vinvestment
vspending vis vequal vto v5 vmillion vbushels vof vwheat vvalued vat v$3/ vbu., vwhich vcosts
v$15 vmillion. vTotal vGDP vis vtherefore v$350 vmillion v+ v$15 vmillion v= v$365 vmillion.
the vproduct vapproach vexample v- vCORRECT✅✅Firm vA vproduces v50,000 vbushels
vof vwheat, vwith vno vintermediate vgoods vinputs.
At v$3/bu., vthe vvalue vof vFirm vA's vproduction vis vequal vto v$150,000. vFirm vB
vproduces v50,000
