Question

Although GDP is a reasonably good measure of a nation's output, it does not necessarily include all transactions and production for that nation. Which of the following scenarios are either not accounted for or measured inaccurately by either the income or the expenditure methods of calculating GDP for the United States? Check all that apply.

a. The quality of goods available to consumers.
b. The value of babysitting services, when the babysitter is paid in cash and the transaction isn't reported to the government.
c. Funds spent by city governments to renovate their buildings.
d. The costs of air and water pollution.

Answer 1

a. The quality of goods available to consumers.

b. The value of babysitting services, when the babysitter is paid in cash and the transaction isn't reported to the government

d. The costs of air and water pollution.

Step-by-step explanation:

Gross domestic product is the sum of all final goods and services produced in an economy within a given period which is usually a year.

GDP calculated using the expenditure approach : consumption spending + Investment spending by businesses + Government Spending + Net Export

Items not included in GDP are:

1. Externality. Negative externality such as pollution isn't included in the calculation of GDP.

2. The quality of materials available

3.criminal activities

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