Gross Domestic product measures the A. market value of all final goods and servi
ID: 1190315 • Letter: G
Question
Gross Domestic product measures the
A. market value of all final goods and services produced by a nations citizens, residents and firms of a nation regardless of the location of production
B. market value of all final goods and services produced by resources located within a nation regardless of who owns those resources
C. market value of all goods and services produced by resources located within a nation regardless of who owns those resources
D. market values of all goods and services produced by a nations citizens and firms regardless of the location of production
E. market value of all goods and services produced within a nation by resources owned by residents and firms of that nation
Explanation / Answer
The answer is E.
By defination, GDP measures the value of all finished goods and services produced in an economy in a given period of time. By saying "produced in an economy" means it is produced within the physical territory/boundary of a country. As the name suggests, it only measures the goods and services produced domestically, since it is produced within the boundary of the country so the resources that are owned by the residents and firms are considered in calculation of GDP.
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