EXPLAINER: What Does GDP Mean & How Is It Calculated?

  1. Value — whatever goods and services that will be considered would need to have a cost (4). For instance, this writing will be beneficial to some people, but because they would not pay for it, it cannot be included in the GDP calculations. But if I package it as an E-book and sell it for a price, it becomes part of GDP calculations. It becomes valued. Invaluable does not count if it is not valued (good pun).
  2. Final Goods and Services — What is included has to be the final good or service (5). A final good or consumer good is a final product ready for sale that is used by the consumer to satisfy current wants or needs. If you buy an Innoson car, it gets counted. If you sell that Innoson car to another person, it is not counted. It becomes second-hand. It is no longer a final good.

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