Which of the following statements is TRUE?
A) The value of illegal activities is included in Gross Domestic Product (GDP).
B) The value of a homemaker's services is included in Gross Domestic Product (GDP).
C) The value of intermediate goods is included in Gross Domestic Product (GDP).
D) Gross Domestic Product (GDP) may be calculated using the income or the expenditure approach.

Question

Quizplus · Accepted Answer

Gross Domestic Product (GDP) can be calculated using either the income approach (summing up all the incomes generated from production) or the expenditure approach (summing up all the final expenditures on domestic goods and services). A is false because illegal activities are not included in GDP as they are not part of legal economic activity. B is false because household services, such as cooking and cleaning, are not counted in GDP because they are not sold in markets. C is false because intermediate goods, which are materials and products used in the production of other goods, are not included in GDP because their value is already accounted for in the final price of the finished goods.

Which of the Following Statements Is TRUE