Scenario: Mike's housekeeper charges $30 for mowing his lawn.
-Refer to the scenario above.Suppose that besides consuming all the potatoes grown on his farm,Edwin buys 5 pounds of potatoes at $0.80 per pound.What is likely to happen in this case?
A) The $4 spent by Edwin will be included in GDP.
B) The $4 spent by Edwin will be excluded from GDP.
C) The value of Edwin's total output will be included in GDP.
D) The value of Edwin's total output will increase.

Question

Quizplus · Accepted Answer

CThe $4 spent by Edwin on potatoes is a market transaction for goods, which is included in the calculation of GDP. Additionally, the value of Edwin's total output, including the potatoes he grows and consumes, is part of the GDP as it represents production within the country.

Scenario: Mike's Housekeeper Charges $30 for Mowing His Lawn