Question:
Which of the following transactions is included in the calculation of Gross Domestic Product (GDP)?
(1) A pension payment received by a retiree.
(2) The purchase of a second-hand car.
(3) The value of vegetables grown in a home garden for personal consumption.
(4) The salary paid to a public school teacher.
(5) The sale of illegal drugs.
Correct Answer:
(4)
Answer Explanation:
GDP counts the value of final goods and services produced in the current period. A teacher’s salary pays for the current service of education. Pensions (transfers), used cars (past production), and home gardens/illegal drugs (non-market) are excluded.
Topic: National Income Year: 2024
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