Define GDP and use circular flow model to explain how GDP can be measured from income or expenditure side. Measurement of GDP and its major components. GDP as a measure of economic growth. Limitations of GDP as a measure of economic growth or the standard of living. GDP (Gross Domestic Product) is the market value of all final goods and services produced in a country in a given time period. Market value goods & services are valued at their market prices. GDP rises if prices rise (more on this later) Final goods and services Bought by final user Intermediate goods are produced by one firm, bought by another, and used as a component of a final good or service. Exlude intermediate goods to avoid double counting.
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