Which of the following is NOT a main component of Gross Domestic Product (GDP)?

Prepare for the UCF ECO3203 Intermediate Macroeconomics Exam. Study with interactive flashcards and multiple choice questions, each providing insightful hints and explanations. Get ready to excel in your exam!

Gross Domestic Product (GDP) comprises several key components that contribute to the overall economic output of a country. These components are consumption, investment, government spending, and net exports (exports minus imports).

In this context, consumption refers to the total spending by households on goods and services, which is usually the largest component of GDP. Investment includes spending on capital goods that will be used for future production, such as machinery and buildings. Government spending encompasses expenditures on goods and services that government consumes for providing public services and infrastructure.

Employment, while intrinsically linked to economic performance and the labor market, does not directly constitute a component of GDP. Instead, it is a measure of how people are engaged in the economy, contributing to output, and while high employment can positively influence GDP growth, it is not part of the formula for calculating GDP itself. Thus, the correct response identifies employment as not being one of the main components of GDP.

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