Double Counting in the Value Added Approach to GDP Statistics

question 115

Multiple Choice

Double counting in the value added approach to GDP statistics is avoided by

• A)correct accounting of the values of exports and imports
• B)choosing only one method to calculate GDP--either the income or the expenditures method
• C)counting only the value added at each stage of a good's production process
• D)counting the value of final and intermediate goods and services
• E)subtracting the total value of intermediate goods and services from the total value of final goods and services

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Definitions:

GDP Deflator

An economic metric that converts the current market value of all goods and services produced domestically into a figure adjusted for inflation.

Changes in Prices

Variations in the cost of goods or services over time, which can be influenced by factors like supply and demand, inflation, or market events.

Amounts Being Produced

Refers to the volume or quantity of goods and services that are generated or manufactured by a business or economy over a specific time period.

Social Security Check

A monthly payment issued by the government to eligible individuals, typically retirees, disabled persons, and survivors of deceased workers, as part of a social insurance program.