Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
The sum of all final goods and services produced in an economy.
B
The total income earned by factors of production in an economy.
C
The difference between total exports and total imports.
D
The total expenditure on consumption, investment, and government purchases.
Understanding the Answer
Let's break down why this is correct
Answer
The production approach to calculating GDP focuses on measuring the total value of goods and services produced in a country during a specific time period. This method adds up the output of every industry, such as agriculture, manufacturing, and services, to find the overall economic activity. For example, if a country produces cars worth $10 million, furniture worth $5 million, and food worth $3 million, the GDP from production would be the total of these values, which is $18 million. This approach helps us understand how much value is created in the economy and which sectors are contributing the most. By analyzing production, we can identify strengths and weaknesses in different industries, guiding future economic decisions.
Detailed Explanation
The production approach adds up all the final goods and services made in a country. Other options are incorrect because This option talks about income earned, which is different from production; This option describes trade, not production.
Key Concepts
production approach
Topic
GDP Calculations and Comparisons
Difficulty
easy level question
Cognitive Level
understand
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