Question 61

Pizza shop proceeds are included in GDP.

The proceeds from a pizza shop directly contribute to the Gross Domestic Product (GDP) as they represent the value of goods and services produced within the economy.

A) Parent doing family laundry

This activity is not included in GDP because it is a non-market transaction. The value of the work done by a parent at home does not have a market price and therefore is not accounted for in economic measures like GDP.

B) Pizza shop proceeds

The proceeds from a pizza shop are included in GDP as they reflect the monetary value of the services provided and the goods sold. This transaction is part of the market economy and contributes to the overall economic activity measured by GDP.

C) Teen washing family car

Similar to the laundry example, this activity is not included in GDP because it is a non-market service. The work performed by a teen for the family does not involve a financial transaction in the market and thus is excluded from GDP calculations.

D) Cash in CD

Cash in a Certificate of Deposit (CD) does not contribute to GDP as it represents financial assets rather than the production of goods or services. GDP measures economic output, and holding cash does not reflect economic activity.

Conclusion

The inclusion of pizza shop proceeds in GDP highlights the importance of market transactions in assessing economic performance. Other options either represent non-market activities or financial assets, which do not contribute to the measurement of economic output. Thus, only option B accurately reflects an activity included in GDP.