Gdp vs Gnh Essay
Net Exports is the difference between exports and imports. Imports are subtracted from the exports since GDP is defined as the output of the economy of a country.
The income approach
The second method of measuring GDP is the income approach. It is calculated by adding up all the incomes by the households and firms in every year. The households and the firms receive their incomes in the form of profit, salaries and interest income which are the expenditures of final goods and services produced. Therefore, adding up all these salaries, interest and profit would be the same amount of GDP as it is measured by the expenditure approach.
The product approach
The product approach measures economic activity by adding the market values of goods and services produced, excluding any goods and services used up in intermediate stages of production. This approach makes use of the value‐added concept. The value added of any producer is the value of its output minus the value of the inputs it purchases from other producers. The product approach computes economic activity by summing the values added by all producers.
Difficulties in measuring GDP
There are some problems which cannot be