It refers to the value of total output of goods actually produced in the whole economy over a period of time, usually one year. It is the gross because allowance has not been made for the consumption of fixed capital used up in the production. When the value of the production is measured at the market price, we have what is commonly referred to as gross domestic product cost; it is regarded as gross domestic product at factor cost. The difference between the two lies in the fact that GDP as factor cost excludes the excess of indirect taxes over subsides that may have been levied on the goods and services, while the other does not.
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