Is GDP measuring output revenue or input spending?

Question:

Is GDP measuring output revenue or input spending?

GDP (Gross Domestic Product):

The macroeconomic metrics or indicators which are usually used to ascertain the value of the goods and services produced by a given country and the nationals of that country are Gross Domestic Product (or GDP) and Gross National Product (GNP) respectively.

Answer and Explanation:

The GDP or Gross Domestic Product of an economy is defined as the gross value of all the goods and services produced within the boundaries of the economy during a given product.

It can ascertained by using the expenditure approach or the income approach or the value-added approach. Since the GDP represents the total value of all goods, it measures the output revenue and not the input spending.


Learn more about this topic:

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Gross Domestic Product: Definition and Components

from Economics 102: Macroeconomics

Chapter 4 / Lesson 3
58K

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