In 2004,four major hurricanes struck Florida and left a wide area of severe damage.Which of the following most accurately indicates how GDP was influenced by the hurricanes?
A)The expenditures on repair services and new construction necessary to restore damaged structures were added to GDP.
B)The expenditures on repair services and new construction necessary to restore damaged structures were subtracted from GDP.
C)Since the expenditures on repair services and new construction would merely leave the nation's wealth in the same position as it was prior to the hurricanes,they were excluded from GDP.
D)The expenditures on new construction to replace structures destroyed by the hurricanes were added to GDP,but expenditures on repair services were excluded.

Question

Quizplus · Accepted Answer

The expenditures on repair services and new construction necessary to restore damaged structures were added to GDP because they represent economic activity and the production of goods and services. This is in line with the expenditure approach to calculating GDP, which includes all final goods and services produced within a country's borders, regardless of whether they are consumed domestically or abroad. As such, the repairs and construction needed to restore damaged structures represent an increase in GDP, as they represent economic activity that did not exist before the hurricanes.

In 2004,four Major Hurricanes Struck Florida and Left a Wide