Four different measures of GDP, Macroeconomics

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Four different measures of GDP

Using circular flow model we see that there are 4 equivalent ways of measuring GDP: 

  • Using the definition: market value of all finished goods (expenditure method)
  • As the sum of all value added from all firms (value added method)
  • As sum of consumption (government andprivate), investment and net exports (components method)
  • As the sum of all returns from factor markets: return on capital, wages and so on (income method)

 


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