Question

Which of the following statements regarding GDP is correct?

a. GDP includes factory production, but not any harm that may be inflicted on the environment.
b. GDP accounts for all activities taking place outside markets.
c. GDP provides detailed information about the distribution of income.
d. GDP is a good measure of economic well-being for all purposes.

Answer 1

Correct option is (a)

Step-by-step explanation:

GDP or Gross domestic product includes monetary value of all goods and services produced within a country. It includes all private and public investments and exports less taxes and imports.

Option b, c and d are incorrect as GDP accounts for only domestic production and not foreign activities. Details about how income is distributed is not given by GDP. GDP provides details about economic condition of the nation. GDP does not indicate wholesome well being of the nation like human development, infant mortality and standard of living.

GDP accounts for factory production but does not account for any production carried out at the cost of environmental degradation.