Which of the following is NOT one of the four components of GDP?

The correct answer highlights that non-profit expenditures are not recognized as one of the four primary components of Gross Domestic Product (GDP). The four main components that contribute to GDP include consumption, investment, government spending, and net exports.

Consumption refers to the total value of all goods and services consumed by households. Investment includes business expenditures on capital goods, such as buildings and machinery, as well as residential construction. Net exports represent the value of a country’s exports minus its imports, reflecting international trade.

Non-profit expenditures do not typically enter into the calculation of GDP since they are not a direct reflection of market transactions that contribute to the overall economic activity measured by GDP. Instead, they are usually accounted for in terms of government spending or consumption when they result in the purchase of goods and services. Thus, identifying non-profit expenditures as not being part of the GDP components underscores the focus on market-driven activities that are captured by the other three components.