Which of the following does GDP omit?
A) Jack purchases $2,300 worth of stock in company X.
B) Bob mows his lawn and washes and irons his shirts.
C) Helen receives $4,000 a year in Social Security payments.
D) a and b
E) a,b,and c

Question

Quizplus · Accepted Answer

GDP measures the market value of all final goods and services produced within a country in a given period. It omits stock purchases (A) because they are financial transactions, not production of goods or services. Personal non-market activities (B), like mowing one's lawn or doing one's laundry, are also excluded because they do not involve a market transaction. Social Security payments (C) are transfers, not payments for goods or services produced, and thus are not included in GDP.

Which of the Following Does GDP Omit