Barter, underground economy, externalities and value of homemakers are excluded in the calculation of GDP.
The GDP only includes goods that are newly created, including those that raise inventories. Excluded are sales of pre-owned items and sales from stocks of products made in earlier years. Since nothing is generated, transfer payments are not included in the GDP calculation.
GDP is calculated as private consumption plus gross domestic product (GDP), government investment, and government spending (exports – imports). Usually, GDP is estimated using the international standard by the nation's national statistical agency.
Net exports, government spending on goods and services, company investments, and household consumption are the four key factors used to calculate the Gross Domestic Product (GDP).
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