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42 votes
42 votes
In a given year, if we sell 100 pounds of apples and 100 pounds of oranges, then the contribution to GDP from selling the oranges will be the same as the contribution to GDP from selling the apples.

a. True
b. False

User Nolat
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1 Answer

16 votes
16 votes

Answer:

B

Step-by-step explanation:

Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year

GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export

Consumption spending includes spending by households on goods and services. Consumption spending includes :

spending on durables - e.g. laptop

spending on nondurables - e.g. clothes, food

spending on services - e.g. payment of hospital bill

the purchase of a textbook by a student is an example of consumption spending on durable goods

Investment - It includes purchases of goods and services made by businesses in the production of goods and services

Government spending - It includes government consumption expenditure and gross investment.

The GDP would differ because the prices of oranges and apples are different

For example, if the price of an apple is $4 and the price of an orange is $1.

The contribution of apples to GDP =$4 x 100 = $400

The contribution of oranges to GDP =$1 x 100 = $100

User Hymloth
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