how do we count the various goods and services and know the total production in each sector?
Answers
Answer:
The following guidelines aid in calculating the total production in a given sector:
- The value of the goods are calculated rather than the numbers of the individual goods.
-The value calculated is of the final products and services which automatically includes the values of the intermediate goods and services.
-The total production is then acquired by adding the total value of the final value of the goods and services in a given sector. This will give us the GDP in this sector.Explanation:
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Answer:
1 ) Not every good service that is produced and sold needs to be counted it makes sense only to include the final goods and services.
2) The value of final goods already include the value of all intermediate goods that are used in making the final product.
3) Economists suggest that the values of goods and services should be used rather than adding up the actual numbers.
4) for example if 10,000 kg of wheat is sold at rupees 8 per kg the value of wheat will be rupees 80,000 the value of 5,000 coconuts at rupees 10 per piece will be rupees 50,000 . Similarly the value of goods and services in the three sectors are calculated and then added up.
5) For instance, a farmer who sells wheat to a flour mill for rupees 8 per kg . The mill grindd the wheat and sells the flower to a biscuit company for rupees 8 per kg . The biscuit company uses the flour and things such as sugar and oil to make four packets of biscuits . It sells biscuits in the market to the consumers for rupees 60 that is Rs 15 per packet . Biscuits are the final goods that is good that reached the consumers.
6) Hence the value of Rs. 60 for the biscuit sold includes the value of flour.
The sum of production in the 3 sectors gives the GDP .
Explanation:
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