Question

Although GDP is a reasonably good measure of a nation's output, it does not necessarily include all transactions and production for that nation. Which of the following activities are either not accounted for or are measured inaccurately in calculations of GDP for the United States? Check all that apply. The value produced when you wash your own car at home The Brazilian wood that is used for flooring in a new U.S. house The variety of goods available to consumers Funds spent by city governments to renovate their buildings The costs of overfishing and other overly intensive uses of resources

Answer 1

Answer:

GDP is the value of all the goods and services produced within the domestic territory of the country in an accounting year.

GDP= Consumption + Investment + Government purchase + Net Exports (Imports)

The scenarios which are either not accounted for or measured inaccurately by either the income or the expenditure methods of calculating GDP for the United States are as follows:

• The value produced doings your own laundry.
• The costs of over fishing and other overly intensive uses of resources  
• The leisure time enjoyed by households

When a U.S. company purchases and imports wood from Brazil to use to build new houses with in the United States, this purchase increases the investment component of GDP while also decreases net exports by the same amount. Therefore, the purchase of wood from Brazil causes no change in US GDP.