Although GDP is a reasonably good measure of a nation's output, it does not necessarily include all transactions and production for that nation.Which of the following scenarios are either not accounted for or measured inaccurately by either the income or the expenditure methods of calculating GDP for the United States? Check all that apply.a) Federal government paychecks to soldiersb) The quality of goods available to consumersc) The loss of enjoyment people incur when scenic land is converted to commercial used) The value produced when you wash your own car at home

GDP is an imperfect measure of welfare. Given cases examples A) Included Rightly ; B) & C) Not Included (Non Monetary) ; D) Non included (self consumed service)

Explanation:

GDP is the total value of goods & services produced by an economy, during a given year. However, it is not a correct measure of welfare. As, it excludes some items of welfare, understates & overstates some.

Methods of calculating GDP :

Expenditure Method = Private Final Consumption Expenditure + Government final consumption expenditure + gross domestic capital formation + net exports
Income Method = Compensation of Employees + Operating Surplus + Mixed Income

A) Federal government pay checks to soldiers : are rightly included in 'compensation of employees' as per GDP calculation by Income method

B) Quality of goods available : This is not included in GDP, as it is a non monetary characteristic. Although it affects consumer's welfare, it is not included in GDP.

C) Loss of enjoyment people incur when scenic land is converted to commercial used : This environment aesthetic loss is again a non monetary loss, it is not included in GDP, but it adversely affects welfare.

D) Value produced when you wash your own car at home : Goods used for self consumption are included in GDP as they are easy to recognise, measure. However, self consumption services are complex to identify & measure. So, this service is also not included in GDP, although it increases welfare.