Question : Which of the following is included in the calculation of GDP?
Option 1: Transfer payments
Option 2: Capital gains
Option 3: Social security benefits
Option 4: Investment spending
Correct Answer: Investment spending
Solution : The correct answer is d) Investment spending.
Gross Domestic Product (GDP) is a measure of the total value of all goods and services produced within a country's borders during a specific time period. It is a comprehensive measure of economic activity within an economy.
Investment spending, which includes business investment in machinery, equipment, structures, and inventory, is indeed included in the calculation of GDP. Investment spending represents spending on the creation of new capital goods and contributes to the overall economic output.
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