The computation of GDP by adding up the dollar value at current market prices of all final goods and services is
A) the expenditure approach.
B) the income approach.
C) transfer payments.
D) the value of all securities.

Question

Quizplus · Accepted Answer

The computation of GDP by adding up the dollar value at current market prices of all final goods and services is known as the expenditure approach. This approach adds up the total spending on consumption, investment, government purchases, and net exports to arrive at the GDP figure. Option B, the income approach, involves adding up all the incomes received by households and firms. Option C, transfer payments, refer to payments made by the government to individuals without any exchange of goods or services, and do not contribute to GDP calculation. Option D, the value of all securities, is not relevant to the computation of GDP.

The Computation of GDP by Adding Up the Dollar Value