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Indicate whether each of the following actions or impacts would increase GDP. a. An individual...

Question:

Indicate whether each of the following actions or impacts would increase GDP.

a. An individual purchases bottled water to avoid a contaminated municipal water supply.

b. An individual obtains her drinking water from a water fountain at her workplace to avoid a contaminated municipal water supply.

Gross Domestic Product:


The summed up amount of expenditures in a nation is collectively referred to as the Gross Domestic Product (GDP) of a nation. The GDP also includes the costs of imports as well as exports in the country.

Answer and Explanation:


a. TRUE: As, if an individual will buy a water bottle from a market, this will increase the overall income to a infinitesimally small extent, thus increasing the GDP.

b. FALSE: As, if the drinking water is obtained from a self-source like a water fountain at the workplace, this would not effect the GDP.


Learn more about this topic:

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Gross Domestic Product: How to Calculate Real GDP

from Economics 102: Macroeconomics

Chapter 5 / Lesson 6
91K

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