Which of the following is not part of GDP? A. A commission charged by a real estate agent for selling a house B. A relief payment from the government to poor families. C. A batch of goods exported abroad. D. A family insurance premium received by the insurance
Question
Which of the following is not part of GDP?
A. A commission charged by a real estate agent for selling a house
B. A relief payment from the government to poor families.
C. A batch of goods exported abroad.
D. A family insurance premium received by the insurance
Solution
The correct answer is D.
Gross Domestic Product (GDP) is the total value of all goods and services produced within a country in a given period. It includes all of consumer, investment, government spending, and net exports.
A. A commission charged by a real estate agent for selling a house is part of GDP because it is a service provided within the country.
B. A relief payment from the government to poor families is part of GDP because it is a form of government spending.
C. A batch of goods exported abroad is part of GDP because it is part of net exports.
D. A family insurance premium received by the insurance is not part of GDP. This is because insurance premiums are considered a transfer of money rather than a payment for goods or services. The service provided by the insurance company (coverage in the event of a loss) is part of GDP, but the premium itself is not.
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