GDP accounting(10 points)

2006-11-14 8:44 am
Discuss how the following activities should be treated in the GDP accounting:


c)The government pays out social welfare to the poor.

d)Peter wins $50,000 from Mark Six ,and uses half of these dividends to treat his friends a dinner.

回答 (1)

2006-11-16 6:55 pm
✔ 最佳答案
Before answering the question, you should know the meaning of GDP - total value of goods and services for residents / citizen within a country for a period of time.

(c) Social welfare is a kind of wealth transfer, no services is provided and therefore no added value on GDP. During the action of wealth transfer, the GDP has no influence upward or downward.
When the poor get the money, the poor will spend it for his usual expense. Such expense (on goods or services) will increase the GDP.

(d) Money win from lottery is not a part of GDP. There is no influence about it because no goods or services provided. So Peter wins Mark Six cannot be treated as a part of GDP.
But he spends such money for dinner which is a kind of services. It will increase the GDP at last.


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