Assertion : When calculating the total value of goods and services produced in a country, the value of all goods and services at each stage of production should be calculated. Reason: At each stage of production some value is added to a good or service, therefore, the value added at each stage of production is added to derive the total value of goods and services in an economy. Mark the option which is most suitable:
Answers
Answer:
Both assertion and reason is wrong
Explanation:
The final value of good and products are calculated.
Assertion: When calculating the total value of goods and services produced in a country, the value of all goods and services at each stage of production should be calculated. - False.
The value of goods and services is calculated overall, but not at each stage of production, when determining the total value of goods and services produced in a nation.
Reason: At each stage of production some value is added to a good or service, therefore, the value added at each stage of production is added to derive the total value of goods and services in an economy. - False.
To determine the overall value of goods and services in an economy, the value contributed at each stage of production is added. As the same value is added more than once, the GDP achieved will be inflated.
GDP:
- The gross domestic product (GDP) is the monetary value of all finished products and services generated in a country during a specific time period (GDP).
- A country's economy size and growth rate can be estimated using its estimated GDP.
- Three different methods—using expenditures, production, or incomes—can be used to determine GDP.
- It can be adjusted for population growth and inflation to provide more detailed information.
- Real GDP takes inflation's effects into account, whereas nominal GDP does not.
- GDP is a crucial instrument for aiding companies, investors, and politicians in making strategic decisions, despite its limitations.
Hence, both assertion and the reason both are incorrect statements.
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