Question

Which of the following is likely to increase a country's gross domestic product (GDP)?

Answer 1

Answer:

d. An individual receiving an annual performance bonus of $5,000

Explanation:

Gross domestic products means value of all the product or services produced and rendered within a country during a specific period of time. The two year old automobile has already been included in prior years GDP, So it will not be included. Social Security and pension plan do not covers the definition of GDP, so these will not be the part of GDP. Annual performance bonus is the earning of an individual which will become the cost for a product in a fixed cost portion.

Answer 2

Answer: In macroeconomics, gross domestic product (GDP) is a macroeconomic magnitude that expresses the monetary value of the production of goods and services of final demand of a country or region during a determined period, normally one year or quarterly.

GDP can be measured by adding up all the final demands for goods and services in a given period. In this case, the destination of the production is being quantified. There are four major areas of spending: household consumption (C), government consumption (G), investment in new capital (I) and the net results of foreign trade (exports-imports).

And it can also be measured by adding the income of all the factors that contribute to the production process, such as wages and salaries, commissions, rents, copyrights, fees, interests, profits, etc. The GDP is the result of the calculation by means of the payment to the factors of the production. All this, before deducting tax.

Thus the statements "b. An increase in Social Security expenses" as government expenses, "c. An increase in retirement and pension benefits to elderly citizens" as subsidies or transfers, and " d. An individual receiving an annual performance bonus of $5,000" as financial interest are likely to increase a country GDP.