The buyer - the demand side - receives a hot fudge sundae and gives up $2.
The seller - the supply side - receives $2 and gives up a hot fudge sundae.
The hot-fudge-sundae transaction results in $2 of gross domestic product.
GDP can be measured in two ways, one for each side of the market:
• From the Demand Side: GDP can be measured by adding the expenditures by the four macroeconomic sectors - household, business, government, and foreign.
• From the Supply Side: GDP can be measured by adding payments to the four factors of production - labor, capital, land, and entrepreneurship.
Both methods result in exactly the same measure.
Measuring GDP from two different perspectives ensures a more accurate measure.