No Bull Economics Lessons

Macroeconomics & Microeconomics Concepts You Must Know

Macroeconomic Performance (3 of 10)

Question 3:
Which of the following statements are true concerning a nation's gross domestic product (GDP)?

I. The buying of financial assets are not included because they do not reflect current production.
III. Wages are not included because they do not reflect current production.
III. Secondhand sales do not count because they counted for the GDP of some previous year.
IV. Intermediate goods are not included in order to avoid double-counting.

A.  I, II, and III
B.  I, II, and IV
C.  I, III, and IV
D.  II, III, and IV

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Correct Answer: C, I, III, and IV. Wages count towards GDP when you calculate GDP using the income approach.