To determine the correct level of GNP, it is necessary to ?
Correct answer: A. To add up the values of goods and services for one year
- A. To add up the values of goods and services for one year
- B. Add up all savings
- C. To count all imports
- D. To add up the value of semi-finished goods
Explanation
GNP is estimated by adding the value of final goods and services produced by a country's residents during a year, with appropriate adjustments for foreign income. Intermediate or semi-finished goods must not be counted separately because that would cause double counting.
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The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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