Why is GDP called a domestic aggregate?
Answer and explanation
Correct answer: Because it measures production within the country’s economic territory
GDP is called a domestic aggregate because it measures the value of final production that takes place within a country’s economic or domestic territory, regardless of whether the producers are residents or foreigners. Therefore, a foreign company producing inside the country contributes to GDP, while a resident producing abroad contributes to another country’s domestic product.
Frequently asked questions
What is the correct answer to this question?
Because it measures production within the country’s economic territory
Why is this the correct answer?
GDP is called a domestic aggregate because it measures the value of final production that takes place within a country’s economic or domestic territory, regardless of whether the producers are residents or foreigners. Therefore, a foreign company producing inside the country contributes to GDP, while a resident producing abroad contributes to another country’s domestic product.
Which subject and chapter does this question cover?
This is a Class 11 Economics question. Chapter: National Income and Related Aggregates.
