How does the calculation of GDP include the costs of natural resource depletion that occurs when output is produced?
A)The value of resource depletion is added to GDP.
B)The cost of resource depletion is not measured in GDP.
C)The cost of resource depletion is added to real but not nominal GDP.
D)Resource depletion causes GDP to overstate well-being.

Question

Quizplus · Accepted Answer

The costs of natural resource depletion are not included in the calculation of GDP. GDP only measures the market value of final goods and services produced within a country's borders within a given time period. It does not take into account the depletion of natural resources or any negative externalities associated with production. Therefore, GDP may not always reflect the true well-being and sustainability of an economy.

How Does the Calculation of GDP Include the Costs of Natural