Question

The total dollar value of purchases in the economy is far larger than GDP primarily because:

A. GDP ignores taxes.
B. GDP excludes the value of intermediate goods exchanged.
C. GDP excludes the output from foreigners working in America.
D. GDP ignores production in the home

Answer 1

The dollar value of GDP is calculated by adding up all the final goods and services produced within a country's borders. It includes consumption spending, government purchases, business investment, and exports, while subtracting imports.

Step-by-step explanation:

The dollar value of GDP is calculated by adding up all the final goods and services produced within a country's borders. It includes consumption spending, government purchases, business investment, and exports, while subtracting imports. In the given example, the dollar value of GDP can be calculated as follows:

GDP = Consumption spending + Business investment + Government purchases + Exports - Imports

GDP = $2,000 billion + $50 billion + $1,000 billion + $20 billion - $40 billion = $3,030 billion