Sia
Question
Statistics
Posted 10 months ago
Which of the following would cause the value of a nation's GDP to increase in a given year?
Choose 1 answer:
(A) Households spend more on domestic air travel
(B) An increase in sale of illegal goods in the economy
(C) More people choose to stay at home to raise their children rather than using paid childcare
(D) An increase in volunteer work
(E) An increase in the sale of used cars
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Answer from Sia
Posted 10 months ago
Solution by Steps
step 1
Identify the components of GDP: Gross Domestic Product (GDP) is calculated as the sum of consumption, investment, government spending, and net exports
step 2
Evaluate the options: Determine which of the provided options would be included in the calculation of GDP
step 3
Analyze Option (A): An increase in household spending on domestic air travel would be included in the consumption component of GDP
step 4
Analyze Option (B): The sale of illegal goods is not included in official GDP calculations as it is part of the informal economy
step 5
Analyze Option (C): Choosing to stay at home to raise children does not involve a market transaction and therefore does not directly increase GDP
step 6
Analyze Option (D): Volunteer work does not involve a market transaction and is not included in GDP
step 7
Analyze Option (E): The sale of used cars is not included in GDP as it does not represent the production of new goods and services within the economy
Answer
A
Key Concept
GDP Calculation Components
Explanation
GDP includes the sum of consumption, investment, government spending, and net exports. Only transactions involving the production of new goods and services within the economy are included.
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