Question : Which of the following is included in the calculation of GDP?
Option 1: Net exports
Option 2: Government purchases of goods and services
Option 3: Consumer spending on non-durable goods
Option 4: Capital gains
Correct Answer: Government purchases of goods and services
Solution : The correct answer is (b) Government purchases of goods and services
Government purchases of goods and services are considered as a component of GDP. It includes the spending by the government on goods and services such as infrastructure, public administration, defense, and healthcare.
Consumer spending on non-durable goods is also included in the calculation of GDP. It refers to the expenditure by households on goods that are consumed or used up relatively quickly, such as food, clothing, and personal care products.
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