Which of the following method(s) is/are used to measure the aggregate value of…
2021
Which of the following method(s) is/are used to measure the aggregate value of goods and services produced in an economy?
I. Expenditure method
II. Income method
III. Product method
Answer: D. I, II and III — The aggregate value of goods and services produced in an economy is measured as national income or GDP. It can be calculated by three equivalent approaches:…
- A.
I and II
- B.
Only III
- C.
I and III
- D.
I, II and III
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Correct answer: D
The aggregate value of goods and services produced in an economy is measured as national income or GDP. It can be calculated by three equivalent approaches: the expenditure method adds final spending, the income method adds factor incomes, and the product or output method adds value added at each stage of production. Hence, expenditure method, income method, and product method are all used, so statements I, II and III are correct.