Which one of the following transactions will be included in the GDP of a country?
A) the purchase of stocks and bonds by the people who live in that country
B) the purchase of goods and services that are made in that country but are bought by people who live abroad
C) the value of volunteer work that is done by the people who live in the country
D) the value of environmental degradation that is caused from manufacturing activities

Question

Quizplus · Accepted Answer

Gross Domestic Product (GDP) measures the market value of all final goods and services produced within a country in a given period. The purchase of goods and services made in the country by people living abroad (exports) is included in GDP calculations, as it represents production within the country. Choices A, C, and D are not included in GDP calculations: A) because the purchase of stocks and bonds is a financial transaction, not a purchase of goods or services; C) because volunteer work does not involve a market transaction and is not paid for; and D) because GDP does not deduct for environmental degradation.

Which One of the Following Transactions Will Be Included in the GDP