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Does GDP measurement include non-market activities and non-reported income? if so, do these underestimate or overestimate...

Does GDP measurement include non-market activities and non-reported income? if so, do these underestimate or overestimate GDP measure?

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Answer #1

The GDP measures total value of the goods and service in terms of the monetary value.The non-market or no-reported income not included in GDP

The following factors are non-market activities

  • The goods produced with hobbies example Gardening
  • The income earned by the other source example school teacher earns extra income by providing tuition to the children it is not included in the GDP
  • The exchange of one to another without money.

These are the non-market activities because it does not produce any value if it includes it overestimates the GDP.

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