GDP, or gross domestic product, is a measure of the value of all final goods and services produced within a country during a specified period of time. Certain goods and services are excluded from the measurement for various reasons, as is investigated below.
(a)These products are not produced domestically and are thus not counted in the gross domestic product.
(b)GDP measures the value of all final goods and services produced in a given year. Thus, if a final product is produced in 2011, it will be counted in 2011's GDP, despite not being sold until 2012. Specifically, car parts that will be sold directly to consumers would count in GDP. However, if these were intermediate goods that will be assembled into a car, they would be excluded from GDP.
(c)Government transfers, such as social security, are excluded from government spending and thus excluded from GDP. They do not directly reflect the value of any good or service.(d)When a restaurant firm, such as McDonald's, purchases food inputs, they are considered intermediate goods. Intermediate goods do not get counted in GDP to avoid double counting.(e)When a household purchases and consumes food, it is used as a final good. Thus, this would be counted in the GDP.
(f)A foreign traveler in the United States will purchase goods just as any resident would. Specifically, this would get counted in GDP as an export.
Expenditure approach to GDP:
a.The value of GDP:
Thus, the value of GDP is
b.The value of net domestic product:
Thus, the value of net domestic product is
c.The value of net investment:
Thus, the value of net investment is
d.The value of net exports:
Thus, the value of net exports is
Increasing Health Care Expenditure and Price index
The share of expenditure on health care has increased steadily over time in households' budget. Over a time period, quality of health care has improved along with the increase in the cost to avail the facility.
Exclusion of quality in health care would lead to biasness, while evaluating a price index. This is because, cost of health care is subject to the quality of health care available, and both are positively related.High cost of health care facility may cause households to shift to other alternatives of health care, such as natural therapies instead of advanced health care instruments.
There is no answer for this question