What is Gross Domestic Product (GDP)?

What does Gross Domestic Product (GDP) measure?

• The total value of all goods and services bought and sold globally in a year.

• The market value of all finished goods and services produced within a country in a year.

• The total income earned by all citizens of a country in a year.

• The market value of all raw materials and intermediate goods used in production.

Which of the following would be considered an intermediate good in the production of a cake?

• A fully baked cake sold to a customer.

• Flour purchased by a baker to make cakes.

• A consumer buying eggs to make an omelet at home.

• A delivery service transporting cakes to stores.

A computer produced in the United States and sold to a customer in France contributes to which country's Gross Domestic Product (GDP)?

• France's GDP, because that's where it was sold.

• The United States' GDP, because that's where it was produced.

• Both the United States' and France's GDP.

• Neither country's GDP, as it's an international transaction.

Why are activities like home production (e.g., mowing your own lawn) or charitable work typically not included in a country's GDP?

• They are illegal activities.

• They do not involve the exchange of money in a market.

• They are not considered productive activities.

• They are too difficult to track for statisticians.