Question

Which of the following statements is true?

A.GDP includes spending on recreation and travel, but it does not cover leisure time.

B.GDP does not include production that is exchanged in the market, but it does cover production that is not exchanged in the market.

C.GDP does not include newly produced goods and services, but counts the buying and selling of previously existing assets

D.GDP includes production that is not exchanged in the market

Answer 1

The correct answer is option A.

Step-by-step explanation:

GDP is a tool to measure economic growth, it includes the value of final goods and services that are produced in the geographical boundaries of a nation within a given time period, generally a year.

The value of the goods and services that are not exchanged in the market are not included, for instance, goods produced for self-consumption.

The GDP also does not include the value of leisure, though the spending on recreation and travel will be included as they are exchanged in the market.