Question

how do we count various goods and services for calculating gross domestic product of a country? explain with an example.​

Answer 1

Answer:

G.D.P. is the sum of the money value of final goods and services produced in each sector during a particular year within domestic territory of a country.

Only final goods and services are counted in G.D.P. because:

(i) The value of final goods already includes the value of all intermediate goods.

(ii) To count the value of the flour and wheat separately is therefore not correct because then we would be counting the value of the same things a number of times.

Answer 2

Explanation:

Gross Domestic Product (GDP) is the market value of the final goods and services produced during a year within the domestic territory of a country. While calculating GDP, final goods and services are counted to avoid the problem of double counting. For e.g. a farmer sold wheat to a flour mill for 10 per kg. The mill grinds the wheat and sells the flour to a biscuit company for .12 per kg. The biscuit company uses the flour, sugar and butter to make 5 biscuit packets. It sells the biscuit to the consumer at .15 per biscuit packet. Here biscuits are the final goods that are purchased by the consumer. Wheat and wheat flour are the intermediate goods used in the production of final good. The value of 15 already includes the value of flour .12. Hence, only the value of final goods and services are included in GDP.

ʜᴏᴘᴇ ɪᴛ ʜᴇʟᴘ ʏᴏᴜ