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 scenarios are either not accounted for or measured inaccurately by either the income or the expenditure methods of calculating GDP for the United States? Check all that apply. The leisure time enjoyed by households The costs of overfishing and other overly intensive uses of resources The value of babysitting services, when the babysitter is paid in cash and the transaction isn't reported to the government Funds spent by city governments to renovate their buildings

Answer 1

Answer:

The leisure time enjoyed by households The costs of overfishing and other overly intensive uses of resources

The value of babysitting services, when the babysitter is paid in cash and the transaction isn't reported to the government

Explanation:

Gross domestic product is the sum of all final goods and services produced in an economy within a given period which is usually a year.

GDP calculated using the expenditure approach =

Consumption spending + Investment spending + Government Spending + Net Export

Funds spent by city governments to renovate their buildings is included in the calculation of GDP as part of government spending.

Items not included in the calculation of GDP are :

1. Leisure

2. Externality

3. Transfer payment

4. Illegal activities

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