Are these activities part of GDP and which part of GDP do they represent? (a) Ms. Lee picks flowers in her garden. (b) Fruits are sold on the market. (c) Patients, hurt in a car accident, are treated in a hospital. (d) Pensioners do community work for free. (e) A garage buys spare tyres to sell them to customers next year
Are these activities part of GDP and which part of GDP do they represent?
by 
pady
ANSWERS: 1
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6-30-2017 The 'P' there stands for "Product". Only production counts, and it is measured in the local currency for convenience. (a) is nice, but it has no market value, so it can't be counted. (b) is in fact a product and has a market value, so that is counted. (c) is not a product, although the various goods used are products. (d) is not a product. (e) is a product and has a market value, so that is counted. Government officials just can't understand these concepts. A few years ago there was a program to give people cash to buy new cars if they would crush their old cars. Well, the first thing they noticed was that most of that money left the country, because most cars are now made in foreign factories. The second thing they noticed was that prices of used car parts skyrocketed because the supply dried up. Officials were totally surprised by those results. They seriously thought they were going to stimulate the American economy.
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