Which of the Following Activities Is Excluded from GDP,causing GDP

question 96

Multiple Choice

Which of the following activities is excluded from GDP,causing GDP to understate a nation's well-being?

• A) The services of used-car dealers.
• B) The child-care services provided by stay-at-home parents.
• C) The construction of new houses.
• D) Government expenditures on military equipment.

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Definitions:

Direct Labor

Direct labor costs are the wages and related expenses paid to employees who directly work on the production of goods or services.

Product Costs

Direct costs attributable to the production of goods, including direct labor, materials, and manufacturing overhead, capitalized as inventory and then expensed as sold.

Total Period Costs

All expenses incurred by a business that are not directly tied to the production of goods or services within a specific period.

Cost of Work

The total expense incurred in producing goods or services, including materials, labor, and overhead costs.