Answer the following question:
How do we count various goods and services for calculating Gross Domestic Product (G.D.P.) of a country? Explain with example.
The various goods and services are counted on the basis of the value of each good or services, not on the basis of actual numbers.
- The value here is referred to the value of final goods and services not the value of intermediate goods.
- It is understood that the value of final goods already includes the value of all intermediate goods that are used in making the final goods.
- The total production of each sector is calculated by adding the value of all final goods and services of the sector in a year.
- The total production of all three sectors within a country is known as the Gross domestic product of the country.