### GDP and Economic Activities: Understanding What’s Counted#### Question:Which of the following **WOULD** be counted in GDP? - [ ] Baking a cake for a family gathering- [ ] Buying some clothes at a garage sale- [ ] Paying a local kid cash to cut your grass- [x] Hiring a professional to clean your home #### Explanation:Gross Domestic Product (GDP) measures the total value of all goods and services produced within a country during a specific period. It includes various forms of economic activities that involve legitimate transactions and formal exchanges of goods and services.- **Baking a cake for a family gathering:** This is a household activity and does not involve a market transaction. Hence, it is not included in GDP. - **Buying some clothes at a garage sale:** Transactions involving second-hand goods such as those sold at garage sales do not contribute to GDP because they do not reflect production within the current period. - **Paying a local kid cash to cut your grass:** Informal transactions without proper documentation and reporting are typically not included in GDP calculations. - **Hiring a professional to clean your home:** This is a formal transaction that involves a market exchange of services and is included in the GDP calculation.Understanding which activities contribute to GDP helps in grasping the broader scope of a country’s economic performance.

GDP stands for Gross Domestic Product of the economy. It is the final value of goods and service…

Which of the following WOULD be counted in GDP? Baking a cake for a family gathering Buying some clothes at a garage sale Paying a local kid cash to cut your grass Hiring a professional to clean your home

Which of the following WOULD be counted in GDP? Baking a cake for a family gathering Buying some clothes at a garage sale Paying a local kid cash to cut your grass Hiring a professional to clean your home

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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