Whose Value of Services Preparing Meals is Included in U.S. GDP?

Whose value of services preparing meals is included in U.S. GDP?

a. Sam's and Ellen's

b. Ellen's but not Sam's

c. Sam's but not Ellen's

d. Neither of them

The value of services preparing meals included in U.S. GDP is option b: Ellen's but not Sam's. The GDP (Gross Domestic Product) measures the total value of goods and services produced within a country's borders during a specific time period. In this scenario, Sam is preparing meals for his family at home, which is considered a non-market activity and not part of the formal economy. Therefore, Sam's services are not included in the calculation of GDP. On the other hand, Ellen is commuting to the U.S. and helping to prepare meals at a restaurant in Idaho. Her services are part of a market activity, as they contribute to the production of goods (meals) for sale. Thus, Ellen's services are included in the U.S. GDP.

Explanation on U.S. GDP:

GDP Definition: Gross Domestic Product (GDP) is the monetary value of all finished goods and services produced within a country's borders in a specific time period.

Sam's Services:

Sam, an American citizen, prepares meals for his family at home. This activity falls under non-market activities because he is not producing goods or services for sale in the formal economy. As a result, Sam's services in preparing meals at home are not included in the U.S. GDP calculation.

Ellen's Services:

Ellen, a Canadian citizen, commutes to the U.S. and helps prepare meals at a restaurant in Idaho. Unlike Sam's non-market activity, Ellen's services at the restaurant are considered market activities. By assisting in the production of meals for sale, Ellen's services contribute to the value of goods and services produced in the U.S. Therefore, Ellen's services preparing meals at the restaurant are included in the U.S. GDP.

Conclusion:

In conclusion, the value of services preparing meals that is included in the U.S. GDP is Ellen's services at the restaurant in Idaho. Sam's activities at home do not contribute to the formal economy and are not part of the GDP calculation. Understanding the distinction between market and non-market activities helps determine which services are included in the GDP calculation.

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