Question

The market value of which of the items would be considered double (or multiple) counting in the calculation of GDP? Indicate the following that they are included in GDP or not included in GDP.
a. a used skateboard you buy for your brother
b. the commission paid to the seller of a previously owned collectors skateboard
c. a new building for tony hawk industries
d. used copy of the tony hawk video game
e. previously owned collectors skateboard
f. ticket for the X games bought from a person on a street corner
g. new skateboard you buy for your niece
h. Wheels used to produce a skateboard that will be sold new

Answer 1

Answer:

Included in GDP :

b. the commission paid to the seller of a previously owned collectors skateboard

c. a new building for tony hawk industries

g. new skateboard you buy for your niece

Not Included in GDP :

a. a used skateboard you buy for your brother

d. used copy of the tony hawk video game

e. previously owned collectors skateboard

f. ticket for the X games bought from a person on a street corne

h. Wheels used to produce a skateboard that will be sold new

Explanation:

Gross domestic product is the total sum of 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 by households + Investment spending by businesses + Government spending + Net export

Net export = exports – imports

When exports exceeds import there is a trade deficit and when import exceeds import, there is a trade surplus.  

Items not included in the calculation off GDP includes:  

1. services not rendered to oneself

2. Activities not reported to the government  

3. illegal activities

4. sale or purchase of used products

5. sale or purchase of intermediate products

the following items aren't included in the calculation of GDP because they are used items and were included in the year they were produced. adding them to GDP would be regarded as double counting

a. a used skateboard you buy for your brother

d. used copy of the tony hawk video game

e. previously owned collectors skateboard

h. Wheels used to produce a skateboard that will be sold new aren't included in the calculation of GDP because it an intermediate product used in the production of skateboards.

ticket for the X games bought from a person on a street corner aren't included in the calculation of GDP because they have already been paid for.