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Comment by Decathect

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.

parent Decathect 8 years ago

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