ECONOMICS
GDP
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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included as an estimate in GDP
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included in GDP when the authorities can prove the amount
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included in the consumption category of GDP
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not counted in GDP
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Detailed explanation-1: -Only goods that are produced and sold legally, in addition, are included within our GDP. That means that goods produced illegally are not counted.
Detailed explanation-2: -Thus, both the 1993 SNA and ESA 1995 depart from a “moral” point of view in which illegal activities should not be included in GDP, because “representatives of the people have determined such products to be ‘bads’ rather than ‘goods’ with sufficient conviction to outlaw them” (Dennison, 1982). 9.3.
Detailed explanation-3: -Transfer payments, donations, and gifts are not included in GDP. These services do not expect any service or payment in return.
Detailed explanation-4: -the underground economy. Underground economy relates to a term used to describe economic activities and transactions that are considered illegal within the borders of a specific nation. If the production of a specific good or service is illegal or unreported, the production is classified under the underground economy.
Detailed explanation-5: -The major items included in the calculation of GDP include business investment, net exports, individual consumptions, and government expenditures. The GDP calculation does not transfer payments, purchases, and sales of used goods, intermediate goods, etc.