Which of the following is TRUE in the calculation of GDP?
A) GDP is positively adjusted to include production in the underground economy.
B) GDP is negatively adjusted to account for environmental damage caused by businesses.
C) GDP does not include goods and services produced privately inside the home.
D) GDP includes a positive adjustment for leisure activities,even if no purchase is required.

Question

Quizplus · Accepted Answer

GDP only includes goods and services that are exchanged in the market, so activities such as cooking at home or cleaning the house are not counted in GDP. Answers A, B, and D are not correct - GDP does not make adjustments for the underground economy, environmental damage, or leisure activities.

Which of the Following Is TRUE in the Calculation of GDP