Asked by Heather Weathers on Jun 29, 2024
Verified
Which of the following will be excluded from the measurement of gross domestic product (GDP) ?
A) The market value of automobiles purchased by the federal government
B) The market value of California wine purchased by a Canadian firm
C) The payment of employees' medical insurance
D) The market value of computers purchased by state governments
E) The market value of transactions in the underground economy
Underground Economy
consists of unreported income from the production of legal goods and services, either due to tax avoidance or the desire to avoid government regulations.
Gross Domestic Product
The total valuation in terms of money or market prices of all goods and services completed within a country’s borders within a specified time period.
- Familiarize oneself with the concept and formulae involved in calculating Gross Domestic Product (GDP) and its importance in measuring economic vitality.
- Pinpoint and expound upon the factors that are accounted for or disregarded in the Gross Domestic Product.
Verified Answer
BO
Brooke OldfinJul 02, 2024
Final Answer :
E
Explanation :
The market value of transactions in the underground economy is excluded from the measurement of GDP because these transactions are not reported to the government and thus not included in official economic statistics.
Learning Objectives
- Familiarize oneself with the concept and formulae involved in calculating Gross Domestic Product (GDP) and its importance in measuring economic vitality.
- Pinpoint and expound upon the factors that are accounted for or disregarded in the Gross Domestic Product.
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