What is considered part of GDP?

The following question tests your knowledge of what activities are included in calculating GDP. Decide for each item whether it is part of GDP, and if so, to which expenditure category it belongs.





4.1. The purchase of electricity by a family is:





A. Counted as part of net exports





B. Counted as part of government purchases





C. Counted as part of investment





D. Counted as part of consumption





E. Not counted in GDP





4.2. The purchase of electricity by a shoe store is:





A. Counted as part of net exports





B. Counted as part of government purchases





C. Not counted in GDP





D. Counted as part of consumption





E. Counted as part of investment

What is considered part of GDP?
Decide for each item whether it is part of GDP, and if so, to which expenditure category it belongs.





4.1. The purchase of electricity by a family is:





D. Counted as part of consumption (AND GOES INTO dp WHEN COMPUTED UNDER EXPENDITURE METHOD; NOT UNDER VALUE ADDED OR FACTOR INCOME METHODS)





4.2. The purchase of electricity by a shoe store is:





C. Not counted in GDP (ONLY THE VALUE ADDED BY THE SHOE STORE GOES INTO gdp, NOT WHAT IT CONSUMES. - THE ELCTRICITY PRODUCED GOES INTO gdpAT THE GENERATION STAGE NETTED OFF FROM COAL EIC CONSUMED TO GENERATE ELCTRICITY)
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