Suppose GDP is 50 trillion resource extraction is 05 trillio

Suppose GDP is $5.0 trillion, resource extraction is $0.5 trillion, production is $1.5 trillion, and distribution is $1.0 trillion. a. How big is GO? trillion b. How big is GO minus GDP? trillion

Solution

In general terms, GO is a broader concept that entails GDP which is therefore called net output. Hence Net output or GDP = Gross output - (Extraction + Production + distribution)

Hence we have GO = GDP + value of (Extraction + Production + distribution) = 5 + 0.5 + 1 + 1.5 = $8 trillion.

Gap between GO and GDP is $8 trillion - $5 trillion = $3 trillion.