6. Limitations of GDP Although GDP is a reasonably good measure of a nation\'s o

Question

6. Limitations of GDP Although GDP is a reasonably good measure of a nation's output, it does not necessarily include all transactions and production for that nation. Which of the following scenarios are either not accounted for or measured inaccurately by either the income or the expenditure methods of calculating GDP for the United States? Check all that apply Funds spent by city governments to renovate their buildings The quality of goods available to consumers The value of babysitting services, when the babysitter is paid in cash and the transaction isn't reported to the government The costs of air and water pollution When a U.S. company purchases and imports wood from Brazil to use to build new houses within the United States, this purchase increases the component of GDP while also net exports by the same amount. Therefore, the purchase of wood from Brazil causes in US GDP.

Explanation / Answer

Ans

B, c and D are not included or accurately measured.

Investment component

Decreases net exports

No change in Gdp

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