What is measured by Gross domestic product (GDP)?
Correct answer: A. Value of all economic activity within nation's border
- A. Value of all economic activity within nation's border
- B. Economic output of a country
- C. Economic activity of federal government
- D. None of these
Explanation
GDP measures the market value of final goods and services produced within a country’s borders during a period. Option b is too vague, while option a captures the domestic-boundary basis of GDP.
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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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