Asked by Adison Evans on Apr 25, 2024
Verified
Which of the following is not true about gross domestic product (GDP) ?
A) It includes only final goods and services.
B) It reflects production in a particular year.
C) Intermediate goods and services are excluded to prevent double counting.
D) It excludes purchases of financial assets.
E) It includes transfer payments.
Gross Domestic Product
GDP is the total monetary or market value of all the finished goods and services produced within a country's borders in a specific time period.
Intermediate Goods
Products used in the production process to make other goods, but are not part of the final product.
Double Counting
The mistake of including both the value of intermediate products and the value of final products in calculating gross domestic product; counting the same production more than once
- Understand the approach to determining and making sense of Gross Domestic Product, with a focus on its inclusions and exclusions.
Verified Answer
VP
Vinith Palakonda8 days ago
Final Answer :
E
Explanation :
Transfer payments, such as Social Security and welfare benefits, are not included in GDP as they represent transfers of income rather than actual production of goods or services.
Learning Objectives
- Understand the approach to determining and making sense of Gross Domestic Product, with a focus on its inclusions and exclusions.