Which of the following transactions would not be included in GDP?

A. Nancy mows her own lawn

B. Gordon hires a painter to make a sign for his business.

C. Ruth buys paint for her house.

D. The Commonwealth of Massachusetts has snow removed on interstate highways.

Solutions

Expert Solution

GDP includes the market value of all the final goods and services produced by a country in a given calendar year.

For option B, Gordon hires a painter. So, the painter gets money in exchange for his service in a market transaction. So, this will be included in GDP.

In option C, Ruth buys paint for her house from the market, Since paint is a final good sold in the market, this will be included in GDP.

In option D, the Commonwealth of Massachusetts removes snow from interstate highways. It is a part of GDP as it contributes to the expenditure of the government

In option A, Nancy mows her own lawn. This is not reflected in any official market transaction since it is voluntary household work and done without any monetary transaction. So this is not a part of GDP.

Option A will not be included in GDP.

Rahul Sunny answered 1 year ago

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