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by Decathect
2748 days ago
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Intermediate goods are explicitly excluded from GDP calculations and resale of finished products only increases GDP by the value added amount. In your scenario GDP would be $2. Regardless, GDP can be calculated by summing all income across all sources. It represents a nationwide increase of wealth. The gap between wage per worker and GDP per worker indicates that, despite labor being the only source of wealth generation, labor only receives a fraction of its productive efforts back as wages. I like it because illustrates the gap between capital and labor, as an alternative to the more traditional income inequality between workers. |
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