Question

What is gross domestic product? Write the formula to calculate gross domestic product at market price.

Answer 1

GDP (Gross Domestic Product): Is the value of all final goods in all three sectors

GDP = C+I+G+(NX)

Where

C- Consumption

I- Investment

G- Government spending

(NX)- Net Exports

Answer 2

In Macroeconomics,Gross Domestic Product(GDP) measures the overall value of all the goods and services produced by any economy within a certain time period,usually an year.

Explanation:

The calculation of GDP at the market price involves two components:the original or initial value of goods and services produced in an economy within a specific time period and any factor or input cost incurred during the intermediate purchase of those goods and services.Now,the GDP at the market price=The original or initial value of the goods and services produced in an economy within a particular time period minus any factor or input cost incurred during the intermediate purchase of those goods and services.In this case,the intermediate purchase of goods and services refers to the buying and selling process during the supply chain process in order to make the goods and services ready for sale in the final consumer market.The original or initial market value of the goods and services is their actual market value without any intermediate or supply chain cost or expenses.