Which of the following is likely to be included in a country's GDP for a particular year? A. The total amount of flour used by bakeries to make bread in that year B. An unsold inventory of automobiles produced in that year C. The total amount of steel used in the production of automobiles in that year D. An unused stock of goods produced in the previous year

Question

Alexia Mercado

Business

10 May, 08:21

Which of the following is likely to be included in a country's GDP for a particular year? A. The total amount of flour used by bakeries to make bread in that year B. An unsold inventory of automobiles produced in that year C. The total amount of steel used in the production of automobiles in that year D. An unused stock of goods produced in the previous year

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Randy Kane · Answer 1

B. An unsold inventory of automobiles produced in that year

Explanation:

GDP is the measure of all the total value goods and services produced within the borders of a country per period. In calculating GDP, economists consider the value of finished products only. Capital goods or goods used to manufacture other products are also not included in GDP. Excluding capital and work-in-progress eliminates the chances of double counting.

The flour used in bakeries and the steel used in the production of automobiles are inputs used to make other goods; hence they will not be included in GDP calculations. Goods produced in the previous period cannot be included in the current GDP calculation as they were accounted for in the year of their production.