Suppose the government passes a law eliminating holidays resulting in increased, production of goods and services. Based on this scenario, which of the following statements is correct?

Question

Quizplus · Accepted Answer

GDP measures the value of goods and services produced within a country in a given period of time. It is calculated by adding up consumption, investment, government spending, and net exports. GDP does not include leisure activities, so if the government eliminates holidays resulting in increased production of goods and services, GDP would definitely increase. Choice A is not correct because even though GDP includes leisure, eliminating holidays would increase production and would ultimately increase the value of goods and services produced, leading to a higher GDP. Choices C and D are incorrect because GDP does not include leisure activities, so it does not affect the calculation whether leisure is included or not.

Suppose the Government Passes a Law Eliminating Holidays Resulting in Increased