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.
Frequently asked questions
What is the correct answer to this question?
Because it is a final good of current production
Why is this the correct answer?
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.
Which subject and chapter does this question cover?
This is a Class 11 Economics question. Chapter: National Income and Related Aggregates. Topic: GDP and Welfare.
