Question

Household production and the underground economy

A) are fully accounted for in GDP figures gathered by the Commerce Department.
B) are not considered formal production of goods and services and, therefore, are not included when calculating GDP.
C) are important but unaccounted for in the Commerce Department's estimate of GDP.
D) are irrelevant because they constitute only a very small fraction of GDP for most countries.

Answer 1

Household production and the underground economy are not included in the calculation of GDP as they typically do not involve formal market transactions.

Step-by-step explanation:

The student's question pertains to what is included in the calculation of Gross Domestic Product (GDP) and specifically whether household production and the underground economy are accounted for in these figures. Household production and the underground economy are not considered formal production of goods and services. Therefore, they are not included when calculating GDP. Sorry, but we can’t determine the content from Tables as mentioned, since that information is not included in your question. Items that are not counted include the sales of used goods, the underground economy, and transfer payments. Production like home production (e.g., making breakfast) is also not counted because these goods are not sold in the marketplace.