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: Definition of GDP.
GDP quantifies the market value of all final goods and services produced domestically. It excludes transactions involving used goods or those previously produced.

Step 2: Evaluation of items.
- (A) Inventory changes are counted as they represent unsold production.
- (B) Wages are part of GDP via the income method.
- (C) Brokerage fees on used goods transactions contribute to GDP as value added.
- (D) Sales or purchases of used goods are not included, as they do not represent new production.

Step 3: Determination.
Since the sale/purchase of second-hand goods is not included in GDP, option (D) is the correct response.