Question

Explain why the three methods of calculating gdp produce the same estimate of gdp

Answer 1

Country's vary in their economic systems, educational levels of individuals, resources, productionmethods, capital goods. The expenditure approach involves adding up all EXPENDITURES in the economy from all different sectors. ... Explain why the three methods of calculating GDP produce the same estimate of GDP.

Answer 2

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GDP stands for Gross Domestic Product.

• It is the sum total of all final goods and services produced in a country during a particular year. It shows how big the economy is.
• It is the sum of production in all sectors.in india this mammoth task is undertaken by central govt. ministry.

GDP = C + I + G + (X – M)

where

• C = private consumption
• I = gross investment
• G = government investment + government spending
• X = exports
• M = imports