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How do we measure aggregate output?
national income and product accounts
What is the complication with calculating aggregate output?
We need to account for intermediary goods
What is method 1 for calculating aggregate output?
Using the value of the final good - this then makes GDP the value of final goods and services added together.
What is method 2 for calculating aggregate output?
Adding the value of intermediary goods to the final good it was used in - this makes GDP the sum of value added int he economy during a given period.
What is method 3 for calculating aggregate output?
Adding the wages paid to workers and the profit of the firm - this makes GDP the sum of income.