Tom Atoe grows fruits and vegetables for home consumption. This activity is
A) excluded from GDP in order to avoid double counting.
B) excluded from GDP because an intermediate good is involved.
C) productive but is excluded from GDP because no market transaction occurs.
D) included in GDP because it reﬂects production.

Question

Quizplus · Accepted Answer

Although Tom Atoe's activity is productive, it is excluded from GDP because no market transaction occurs. GDP measures the market value of all final goods and services produced within a country's borders in a given time period, and since Tom Atoe's fruits and vegetables are not sold in the market, they are not included in GDP. This exclusion is intended to avoid double counting, as these fruits and vegetables may already be counted as inputs in some other final good that is included in GDP.

Tom Atoe Grows Fruits and Vegetables for Home Consumption