1. Products that remain unsold are also counted as part of GDP. Specifically, they are classified as additions to business inventory and thus as an implicit form of business expenditure (investment).
2. Ideally, the electric saw would be added to national output when it was first purchased (as investment) and then gradually subtracted from output as it depreciates (that is, as it is itself consumed in the production process). This approach would yield a net measure of national output (i.e., net of depreciation), commonly called net domestic product, or NDP. Because depreciation can be difficult to measure, however, it is often ignored in calculating national output. As a result, economists and policy makers typically rely more ...
Get Financial Planning, Budgeting, and Forecasting: Financial Intelligence Collection (7 Books) now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
