Do government statisticians calculate GDP by simply adding up the total sales of all business firms in one year? Explain.© BrainMass Inc. brainmass.com October 10, 2019, 3:02 am ad1c9bdddf
Calculation of GDP is not as simple as it seems. GDP is the sum total of all goods and services, converted in monetary terms, every year. There are three (3) approaches or ways in which GDP is measured: a.) Income Approach, b.) Expenditure Approach, and c.) Value-added or Industrial Origin Approach.
Income Approach, as the name connotes, measures the earning of individuals and companies in terms of wages, interests earned, rents, and profits and similar accounts ...
This solution describes the different approaches in the computation of GDP..