The Importance of Gross Domestic Product - Assignment Example

Interest in AT &T bonds would be included in the calculation of GDP when calculating GDP using the income approach. Interest earned by an individual income is included in the GDP in the year the interest was earned by an individual.
b. Social security payments received by a retired worker are not accounted for in the calculation of GDP since it is just transfer payment.
c. The service of a painter in painting the family home is included in the calculation of GDP if the painter was an outside contractor and pays tax. However, if the painter is a family member, his work, or benefit will not be included in the calculation of GDP (Mankiw 506).
d. The income of a dentist is included in the calculation of GDP on the year the income was earned after deducting the allowable expenditures of the dentist work (Landeefeld, Seskin, and Fraumeni 195-196)
e. Money received by Smith by selling his textbook to a book buyer is not included in the calculation of GDP since its value had already been included in the GDP in the year Smith purchased it.
f. The monthly allowance a student receives from home is not included in the calculation of the GDP since it is only a payment transfer. Read More