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 is 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.

a. The loss of enjoyment people incur when scenic land is converted to commercial use
b. The value of babysitting services, when the babysitter is paid in cash and the transaction isn't reported to the government
c. Expenditures on federal highways
d. The variety of goods available to consumers

Answer 1

Answer:

A. The loss of Enjoyment People incur when scenic land is converted for commercial use

B. The value of baby sitting services when the baby sitter is paid cash and the transaction isn't reported to the government

D. The variety of goods available to the consumers

Explanation:

The Gross Domestic Product (GDP) represents the total market value monetarily of all finished products or all services that are produced in a country, within its borders and it is measured for a period of time.

The GDP broadly measures this market value and since it represents a broad measurement, there are apparently transactions and productions or even services that won't be adequately measured or accounted for

1. The loss of enjoyment people incur when scenic land is converted to commercial use is a cost that cannot be monetarily valued hence it won't be accounted for

2. The value of babysitting services, when the babysitter is paid in cash and the transaction isn't reported to the government- This will not be measured accurately because not all persons who hire baby sitters will report the transaction

3. The variety of goods available to consumers are numerous and the government will not be able to account for every single one