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There are three generally accepted ways to calculate GDP: Product approach: adding up the market values of all goods/services nal. Expenditure approach: adding up the total expenditure of di erent sectors of the economy. Income approach: adding up the income generated by the production of nal goods/services.
A more intuitive way to avoid double counting the value of intermediate goods in gross domestic product is to, rather than try to isolate only final goods and services, look at the value added for each good and service (intermediate or not) produced in an economy.
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Learn Value Added Method for Measuring GDP with free step-by-step video explanations and practice problems by experienced tutors.
GDP is the BETTER measure of domestic economic activity. Gross domestic product is the total value of all final goods and services produced within a country over a given year.
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