169k views
2 votes
Explain whether the following should be included in a country's GDP of 2018.

a) Motor spares produced for a car assembly.
b) Bicycles produced by foreign citizens in the country.

User Teslasimus
by
8.1k points

1 Answer

4 votes

Final answer:

Motor spares produced for car assembly are intermediate goods and not counted directly in GDP, while bicycles produced by foreign citizens within a country are included in its GDP as domestic production.

Step-by-step explanation:

When determining what should be included in a country's Gross Domestic Product (GDP) for the year 2018, it is crucial to understand the components that make up GDP. GDP represents the total market value of all final goods and services produced within a country in a given period.

For item (a), motor spares produced for a car assembly, these would not be counted directly in GDP for 2018 if they are considered intermediate goods. They contribute to the final product's value instead, which when sold as a new car, would be included in that year's GDP.

In the case of item (b), bicycles produced by foreign citizens in the country, these are included in the GDP as the production takes place within the country's borders. GDP accounts for domestic production, so even if the labor is provided by foreign citizens, the goods produced are part of the nation's economic output.

User ChviLadislav
by
7.7k points