ECONOMICS
GDP
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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is counted as consumption in GDP
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is not counted in GDP b/c it’s not reported on tax forms
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not counted in GDP b/c it’s a transfer payment
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included in investment sector of GDP if you save it
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Detailed explanation-1: -GDP does not count productive services, such as child care, food preparation, cleaning, and laundry, provided within the household.
Detailed explanation-2: -Not all productive activity is included in GDP. For example, unpaid work (such as that performed in the home or by volunteers) and black-market activities are not included because they are difficult to measure and value accurately.
Detailed explanation-3: -The GDP is the total of all value added created in an economy. The value added means the value of goods and services that have been produced minus the value of the goods and services needed to produce them, the so called intermediate consumption.
Detailed explanation-4: -In calculating GDP, investment does not refer to the purchase of stocks and bonds or the trading of financial assets. It refers to the purchase of new capital goods, that is, business equipment, new commercial real estate (such as buildings, factories, and stores), residential housing construction, and inventories.