Which of the statements given below about Gross Domestic Product are correct 1 n...........

Economic Affairs Growth and Indicators

Which of the statements given below about Gross Domestic Product are correct?

1. It is the value added by all the firms in the economy.

2. It is the final value of goods and services produced in the economy.

3. It is the sum of final consumption and investment expenditure by the household, private and government sector and net of exports and imports.

4. It is the income received by all the four factors of production.

Select the correct answer using the code given below:

1 and 2 only

1, 2 and 3 only

1, 2 and 4 only

1, 2, 3 and 4

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Explanation:

GDP is the sum of the final value of all goods and services (consumption and capital) produced in the economy or it can also be defined as value added by all the enterprises in the economy. So, 1 and 2 statements are true. Whatever goods and services (consumption and capital) are produced in the economy is ultimately purchased by household, private, government sector and the rest is exported. So 3 statement is true. By Income method, GDP is also equal to the income received by the four factors of production i.e. Profit, Rent, Interest and wages. So statement 4 is also true