Which of the following is true regarding GDP as a measure?

• A. GDP includes the value of used goods sold during the period.
• B. GDP includes the market value of all final goods and services produced within a country in a given period.
• C. GDP counts both final and intermediate goods to avoid double counting.
• D. GDP measures only the value of goods produced by citizens, regardless of location.

Answer: (B)

Verified step by step guidance

1. Step 1: Understand the definition of GDP (Gross Domestic Product). GDP measures the total market value of all final goods and services produced within a country's borders during a specific time period.
2. Step 2: Recognize that GDP includes only final goods and services to avoid double counting. Intermediate goods, which are used to produce final goods, are excluded because their value is already embedded in the final goods.
3. Step 3: Note that GDP does not include the value of used goods sold during the period, since these goods were counted when they were first produced and sold.
4. Step 4: Understand that GDP measures production within a country's borders regardless of the nationality of the producer. It does not measure goods produced by citizens outside the country; that is measured by Gross National Product (GNP).
5. Step 5: Based on these clarifications, identify the correct statement: GDP includes the market value of all final goods and services produced within a country in a given period.