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Answered 1 days AfterApr 13, 2022

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Prince answered on Apr 14 2022
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Question1; What are the three different methods of measuring the GDP and why in theory should they give the same result?
Answer: Following are the three different methods of measuring the GDP:
· The Value-added Method: Value-added refers to an organization's adding of value to a raw material (intermediate good) through its industrial activities. The variance between the value of the output produced and the value of intermediary products is used to compute it. The value-added technique of computing national income is commonly used because it eliminates duplicate counting, which is a common inaccuracy when estimating national income.
· The Income method: This is the total amount of money made from the selling of products and services, including earnings, salaries and other staff payments, rental revenue, and interest received.
· The Expenditure Method: The total spending on finished products and services provided by households, investors, the government, and net exports is calculated using the expenditure method
Let's start with the relationship between total value added and total expenditure on domestically manufactured final products...
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