Problems+with+Accurately+Counting+GDP

By Ryan Meinen · Problems- Intermediate goods represent a double counting, the size of the “underground economy”, it does not capture the non-paid sector. GDP includes sales tax, it does not reflect a change in quality of goods, GDP does not reflect true value to society, and society cares more about real GDP then GDP. · Economic transactions that are not included: sale of intermediate goods, sales that merely transfer ownership of assets, sale of second hand goods, public and private transfer payments. · Productive activities that are excluded:  Ø Underground activities: Illegal activities(drugs, prostitution, etc.), unreported(but legal) activities (babysitting, under the table work)  Ø Nonmarket activities: Services of homemakers, Do-It-Yourself production, volunteer services, etc. Intermediate goods are goods that go into the final good or service. Public transfer payments are things like EI, CPP, and subsidies. Private transfer payments are things like gifts and donations. A transfer payment is simply defined as a one-way transaction in which payment is made but no goods or services come back in return. __ Sources/References: __ []
 * Problems with Accurately Counting GDP**