Question

2.) How do pollution and crime affect GDP? How do pollution - and crime-control expenditures impact GDP?

Answer 1

1. None of emissions nor crime is included in GDP estimates (as "bads" to be subtracted). However, as currently manufactured goods and services, consumer spending for pollution- and crime-control is included in the GDP.

2. An open economy is a form of economy where there is trade in products (goods and services) by the domestic community and out. Trade may take the form of managerial trade, technology transfers, and goods and services of all kinds. (Nevertheless, there are certain exceptions which can not be exchanged; for example, a country's rail services can not be shared with another country for the purpose of using the service.) If a country has an open economy, that country's expenditure in any given year does not have to be equal to its production of goods and services. A nation can spend more money than it produces by borrowing from abroad, or can spend less than it produces and giving foreigners the difference