Final answer:
The transactions that contribute to GDP include the cost of hospital stays, child care provided by a licensed day care center, and new car sales. Transactions like the rise in life expectancy, child care by a grandmother (unless paid), used car sales, the variety of goods in stores, and intermediate goods like iron used in manufacturing are not included in GDP.
Step-by-step explanation:
When considering transactions that contribute to GDP, it's essential to identify which activities involve the production of new goods and services within a country during a specific period. Here are some specifics:
- The cost of hospital stays is included in GDP as it is a payment for a healthcare service provided within the country.
- Child care provided by a licensed day care center is part of GDP because it is a paid service that contributes to economic activity.
- A new car sale contributes to GDP as it reflects the market value of a car that was produced within the current year.
However, not all transactions are included in GDP. The following do not contribute:
- The rise in life expectancy does not reflect a market transaction and thus is not included in GDP.
- Child care provided by a grandmother, unless she is paid and reports the income, does not count towards GDP as informal or unpaid services are generally not included.
- Used car sales, unlike new car sales, do not contribute to GDP as they do not represent the production of new goods within the current year.
- The variety of cheese or any commodity in supermarkets is not counted in GDP; only the market transactions for these goods are included.
- The iron that goes into steel, which then goes into a refrigerator, is an intermediate good and is not directly counted in GDP to avoid double counting.