Question

Gross Domestic Product (GDP) is defined as:

A) Intermediate goods plus final goods.
B) Net National Product (NNP) minus depreciation.
C) National income plus depreciation.
D) Dollar amount of all final goods and services produced within a country's national border in a year.

Answer 1

GDP is the dollar value of all final goods and services produced within a country in a year, avoiding double counting, and includes products ready for end-user consumption.

Step-by-step explanation:

Gross Domestic Product (GDP) is the dollar value of all final goods and services produced within a country's national borders in a year. Final goods refer to products that are at the furthest stage of production at the end of the year, ready for consumption by the end user. Government statisticians must carefully calculate GDP to avoid double counting, which occurs if output is counted multiple times as it moves through various stages of production. For example, counting the value of tires once when they are produced by a tire manufacturer, and again when they are incorporated into a new truck sold by an automaker, would lead to such a mistake, as the truck's price already reflects the value of the tires.