Question

GDP usually includes final goods and services produced in a year. Suppose Honda produced a product in Japan in the year 2013 but sold it in 2014. Would this be included in Japan's GDP calculation for 2014? Explain. Can we include the value of stocks and bonds sold in the same year in GDP? Discuss.

Answer 1

Answer:

No. It would not be included in the GDP because GDP only includes goods produced in the year it was produced not sold. The Honda would be included in the 2013 GDP.

Bonds aren't included. This is because the GDP only includes goods and services. Bonds is neither a good or a service.

Explanation:

GDP is the sum of final goods and services produced in an economy within a given period which is usually a year.

GDP calculated using the expenditure approach = Consumption spending + Investment spending + Government Spending + Net Export

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