Business

Question

EconomicsAlthough 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?
a. The value of baby-sitting services, when the babysitter is paid in cash and the transaction isn't reported to the government.b. The costs of air and water pollution.c. Funds spent by city governments to renovate their buildings.d. The leisure time they have.
When a U.S. company purchases and imports wood from Brazil to use to build new houses within the United States, this purchase increases the_____component of GDP while also_____net exports by the same amount. Therefore, the purchase of wood from Brazil_____in US GDP.

1 Answer

  • 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:  

    a. The value of baby-sitting services, when the babysitter is paid in cash and the transaction isn't reported to the government.

    b. The costs of air and water pollution

    d. The leisure time they have

    The purchase of wood from Brazil, the import component of GDP increases whole net exports decreases by the same amount. The purchase of wood from Brazil decreases US GDP.

    Gross domestic product is the sum of final products produced in a country within a given period. GDP can be determined using the expenditure, income or value added product.

    GDP calculated using the expenditure approach = Consumption spending + Investment spending + Government spending + Net export

    Items not included in the calculation of GDP includes:  

    1. Activities not reported to the government  

    2. illegal activities

    3. sale or purchase of used products

    4. externalities

    To learn more, please check: https://brainly.com/question/22684423

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