Final answer:
GDP does not directly include the value of intermediate goods as it only measures the current value of final goods and services produced domestically. Items like the rise in life expectancy or the unpaid child care by a family member are also not included as they are not market transactions.
Step-by-step explanation:
Gross Domestic Product (GDP) does not directly include the value of intermediate goods sold during a period. GDP measures the dollar value of all final goods and services produced domestically and therefore includes:
The cost of hospital stays (a service rendered during the period).
- Child care provided by a licensed day care center (as a paid service).
- A new car sale (as it is a final good produced and sold within the period).
However, GDP does not include:
The rise in life expectancy over time (not a market transaction).
- Child care provided by a grandmother (unpaid home production).
- A used car sale (as it is not a new production).
- The greater variety of cheese available in supermarkets (variety is not directly measurable in economic output).
- The iron that goes into the steel that goes into a refrigerator bought by a consumer (to avoid double counting, only the final goods are counted).