Question

Which of the following factors are considered when calculating GDP?

I. goods produced within a country by citizens of that country
II. goods produced within a country by residents who are not citizens
III. goods produced within a country for use in production of other goods
IV. goods produced by a country’s citizens outside of its borders
a.
II and III
b.
I only
c.
I and II
d.
I, II, III, and IV


Please select the best answer from the choices provided

A
B
C
D

Answer 1

C

GDP measures the value of final goods and services produced within a country's borders, regardless of the producers' citizenship, so I and II are included. Goods produced abroad by a country's citizens (IV) are not part of GDP (they belong to GNP), and intermediate goods used up in production (III) are excluded to avoid double counting.