Gross Domestic Product at Market Price is the?

The correct answer is Option (2) → Market value of all final goods and services produced within a domestic territory of a country measured in a given financial year.

Gross Domestic Product at market price is a market value. It covers all final goods and services produced within the domestic territory of a country in a year.

• Option (1) Gross Domestic Product at market price less net product taxes. — Incorrect. Taking net product taxes (product taxes less product subsidies) away from GDP at market price gives GDP at factor cost, which is a different measure.

• Option (2) Market value of all final goods and services produced within a domestic territory of a country measured in a given financial year. — Correct. Only final goods are counted, as they already include the value of the intermediate goods used to make them.

• Option (3) Expenditure to maintain the current GDP level. — Incorrect. GDP is the value of what is produced in the year. A different measure, Net Domestic Product at market prices, is GDP less depreciation. It lets policy-makers estimate how much the country must spend to maintain its current GDP.

• Option (4) Income earned by factors in the form of interest, profit, wages within the domestic territory of a country. — Incorrect. The income earned by the factors within the domestic territory is Net Domestic Product at factor cost. It leaves out depreciation and net taxes.