Question

Which of the following is not considered in the calculation of GDP?

• A. Inventory stock
• B. Wages
• C. Brokerage/commission on purchasing second-hand goods
• D. Sale/purchase of second-hand goods

Hint:

Only new goods and services are included in GDP. The sale of second-hand goods is excluded since it does not represent new production.

Answer 1

The Correct Option is D

Step 1: Understanding GDP calculation.
GDP measures the market value of all final goods and services produced within a country. It does not account for transactions of second-hand goods or goods that have already been produced.

Step 2: Analysis of options.
- (A) Inventory stock: Changes in inventory are included in GDP because they reflect production that has occurred but not yet sold.
- (B) Wages: Wages are included in GDP as part of the income approach to calculating GDP.
- (C) Brokerage/commission on purchasing second-hand goods: This is included in GDP because it reflects the value added to the transaction.
- (D) Sale/purchase of second-hand goods: This is not included in GDP since it does not reflect the production of new goods or services.

Step 3: Conclusion.
The sale/purchase of second-hand goods is excluded from GDP, so the correct answer is (D).