Questions: National defense services provided by the military are Select one: a. included in GDP at market prices. b. excluded from GDP because they are not sold in markets. c. included in GDP at cost. d. excluded from GDP because they are intermediate goods.

The answer is c. included in GDP at cost.

This option is incorrect because national defense services are not sold in markets, so they do not have a market price. GDP includes goods and services that are sold in markets at market prices, but for government services like national defense, this is not applicable.

While it is true that national defense services are not sold in markets, they are still included in GDP. Government services are included in GDP at their cost of production, even though they are not sold in markets.

This is the correct option. National defense services are included in GDP at their cost of production. This includes the salaries of military personnel, the cost of equipment, and other expenses related to providing these services. Since these services are not sold in the market, their value is measured by the cost incurred by the government to provide them.

This option is incorrect because national defense services are not considered intermediate goods. Intermediate goods are those that are used in the production of final goods and services. National defense is a final service provided by the government and is included in GDP at cost.