Several houses built in a country during a certain year were mildly damaged because of an earthquake.Which of the following is likely to happen in this case?
A) The market value of the damage will not be included in the calculation of the country's GDP.
B) The market value of the damage will be deducted from the country's GDP.
C) The market value of the damage will be included in the calculation of the country's trade deficit.
D) The market value of the houses will not be included in the calculation of the country's GDP.

Question

Quizplus · Accepted Answer

Mild damage to houses due to an earthquake does not contribute to the production of goods and services in the country, and hence is not included in the calculation of the country's GDP. Only the value of final goods and services produced within a country's borders during a given period of time is included in the calculation of GDP.

Several Houses Built in a Country During a Certain Year