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Why is the value of a new bicycle sold in the market included in GDP?

Answer and explanation

Correct answer: Because it is a final good of current production

GDP records the market value of final goods and services produced within an economy during a specified period. A newly manufactured bicycle sold to a consumer is current production and is treated as a final good, so its value is counted in GDP. Option C is correct. A used bicycle is excluded from current production, while a transfer payment and an unpaid service do not represent newly produced market output.

Related tags

GdpFinal GoodsCurrent ProductionMarket ValueGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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