Question

Which of the following would not be counted in the calculation of GDP? Choose one or more: A. paying for a local garage to rotate the tires on your motorcycle B. government spending on social security C. buying a counterfeit designer purse from a guy in an alley D. paying for your tolls on the Pennsylvania Turnpike E. giving the dog a haircut and a bath F. buying a brand new car

Answer 1

Correct options are: (D), (E), (F).

Step-by-step explanation:

Since the dog seller does not pay taxes, he is evading tax and is therefore conducting illegal transactions. Illegal transactions are excluded from GDP.

Mowing the law does not have an imputed market value and is excluded from GDP.

Government spending on food stamps is a transfer payment since no value gets added in return, therefore is excluded.