Question

What is included in GDP: all goods, all services, or both? Explain in 150 + words

Answer 1

GDP includes the production of the goods and services that took place in the domestic territory during a financial year and it includes the production of all goods and the production of all services. GDP can be calculated by using the income approach, expenditure approach, and the production approach. All the three approaches gives the same value of the GDP, and income approach includes the income generated via transactions related to the goods and services, whereas expenditure approach includes the expenditure on the consumption of goods and services, and production approach includes the value added during the production of goods and services at various stages of production.