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:

GDP only includes the value of new goods and services produced within a country. The sale or purchase of second-hand goods does not contribute to GDP as these goods have already been counted in previous periods.

Answer 1

The Correct Option is D

Gross Domestic Product (GDP) is a measure of the total value of all final goods and services produced within a country during a given period. It includes the value of new production but does not account for the resale of used goods, as these transactions do not represent current economic production. - (A) Inventory stock: Inventory stock is considered part of GDP, as changes in inventory levels (increases or decreases) reflect economic activity in terms of production or consumption.
- (B) Wages: Wages are considered in the calculation of GDP, as they are part of the income generated from the production of goods and services.
- (C) Brokerage/commission on purchasing second-hand goods: Brokerage or commission fees are considered in GDP calculations because they are part of the value-added in the economic transaction.
- (D) Sale/purchase of second-hand goods: The sale or purchase of second-hand goods is not included in GDP, as these goods were already counted in GDP when they were originally produced. The transaction of second-hand goods does not contribute to new production.
The correct answer is (D), as the sale and purchase of second-hand goods do not contribute to the current economic production, and hence, are not included in GDP. 

Final Answer: (D) Sale/purchase of second-hand goods.