Which the following are counted in this years GDP?
Explain your answers.
What is meant by GDP?
Gross domestic product is the market value of all final goods and services that produced by factor of production within a country in a given a time period
a. Anita cooked meals for her family (2m)
GDP is regarding about the market value of final goods, so according this statement anita involves in non market activity because she just cooked meals for her family.
b. Sally bought cottons to produce clothes. (2m)
the clothes is produced t by sally is final goods, thus it is counted in this years GDP due to GDP only includes final goods and services rather than intermediate goods. In this case, cottons is bought by sally from the retailer is also counted in this year’s GDP because the cottons are the final goods for the retailer.
c. A local car dealer sold a second car (2m)
Since the GDP is only counted the final goods and services, therefore the secondhand card that sold by the car dealer is not counted in this year’s GDP because it is the secondhand car rather than firsthand car.
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