Question

Which of the following does NOT add to U.S. GDP?

1. Air France buys a plane from Boeing, the U.S. aircraft manufacturer.
2. General Motors builds a new auto factory in North Carolina.
3. The City of New York pays a salary to a policeman.
4. The federal government sends a Social Security check to your grandmother.

Answer 1

The correct answer is option 4.

Step-by-step explanation:

The GDP includes the final goods and services produced in an economy in a year. It does not include intermediate goods, underground economy, investment in financial assets, home production and transfer payments.

When government pays a social security check no final goods or services are being produced in the process. So this cannot be included in the US GDP.