The following activities would not be included in the GDP: the purchase of a new car,...

The following activities would not be included in the GDP: the purchase of a new car, gratuities at a restaurant, and payment to a neighbor for lawn-mowing services. Identify three more examples of transactions that would not be included in the GDP. How might the exclusion of these hinder our understanding of economic well-being?
In your opinion, are GDP and CPI good measures of economic health? Explain your answer.

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Expert Solution

Before starting the question let us clear with the term GDP

GDP is the calculation of final goods and services within the boundary of a country in a financial year

The other three things that are not included in GDP are

happiness index

standard of living

stock and Bond prices in the market

Excluding this from the calculation of GDP will actually don't give the actual data of GDP

Because how can we say that people living in that country are happy or not, whether they have a perfect living standard or not

So GDP and CPI are not accurately measured the economic health and well being of the economy

Rahul Sunny answered 2 years ago

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