Which of the following is directly accounted for in the calculation of GDP?
A)the value of one hour of leisure as measured by the hourly wage one would otherwise earn by working
B)the value of repairing your own kitchen sink as measured by the average rates charged by local plumbers
C)cash earnings from an illegal poker game
D)improvements in quality of life from the reduction of pollution
E)None of the above items is accounted for in GDP.

Question

Quizplus · Accepted Answer

GDP only measures the value of goods and services that are produced within a country's borders for final consumption or investment purposes. None of the items listed are directly accounted for in GDP. Option A is a hypothetical situation and not an actual economic transaction. Option B reflects the value of the homeowner's own labor, which is not a market transaction. Option C reflects an illegal activity and is not included in GDP. Option D is an improvement in quality of life that is not captured by the market transaction.

Which of the Following Is Directly Accounted for in the Calculation