Question

The gross domestic product of a country does not include:
a. the value of intermediate goods produced in an economy during a given period.
b. the increase in inventories during a given period.
c. the expenditures by government for newly produced goods and services during a given period.
d. household expenditure on durable goods. e. the value of final output during a given period.

Answer 1

Answer:

The correct answer is option a.

Explanation:

The GDP or gross domestic product of an economy measure the final goods and services produced in the economy in a year.  

It does not include intermediate goods, underground economy, second-hand goods, home production and investments in financial assets.  

The increase in inventories is included as investment expenditure. The expenditures of the government are included as government spending.  

The household expenditure is included as consumer spending. The value of all the final goods and services produced in the economy in the given period is included.