Question : Which of the following is included in the calculation of GDP?
Option 1: Investment spending on new factories
Option 2: Payments for government transfer programs
Option 3: Consumer spending on used cars
Option 4: Income earned by foreign nationals in the country
Correct Answer: Investment spending on new factories
Solution : The correct answer is (a) Investment spending on new factories
Gross Domestic Product (GDP) measures the total value of goods and services produced within a country's borders during a specific time period. In the calculation of GDP, investment spending on new factories, equipment, and structures is considered as part of the "investment" component of GDP. This includes expenditures made by businesses to expand their productive capacity and contribute to economic growth.
Option 1: Investment spending on stocks and bonds
Option 2: Government transfer payments
Option 3: Consumer spending
Option 1: Payments for government transfer programs
Option 2: Consumer spending on durable goods
Option 3: Income earned by foreign nationals in the country
Option 4: Capital gains
Option 2: Consumer spending on non-durable goods
Question : Which of the following is not included in the calculation of national income?
Option 1: Wages earned by foreign nationals in the country
Option 2: Interest income earned by domestic residents from foreign investments
Option 3: Profit earned by domestic firms in foreign countries
Option 4: Payments for goods and services in the underground economy
Option 1: Transfer payments
Option 2: Capital gains
Option 3: Social security benefits
Option 4: Investment spending
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