Explain Why Each of the Following Items Is Excluded from GDP

question 36

Essay

Explain why each of the following items is excluded from GDP: (a) profits from the stock and bond market (b) transfer payments (c) sale of used goods (d) goods and services produced in the home.Explain why the following items are included in GDP: (a) depreciation (b) change in business inventories( c) indirect taxes

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Definitions:

Stagnating Wages

The phenomenon where wages remain constant over time without significant increases, often leading to decreased purchasing power due to inflation.

Steady Interest Rates

A condition where interest rates remain the same over a period of time, leading to predictable financing costs.

DVDs

Digital Versatile Discs, storage media used for movies, data, and software.

Tolerance for Ambiguity

The degree to which an individual is comfortable with uncertainty, complexity, and situations where clear information or definitive outcomes are not available.