Ouiz 7 Indicate the answer choice that best completes the statement or answers t
ID: 1102473 • Letter: O
Question
Ouiz 7 Indicate the answer choice that best completes the statement or answers the question. -1. Micah buys a used car for si0,000 and spends S200 on a new radio that is made in the US. The end result of these two transactions is a.U.S. consumption purchases increase by $200 and U.S. GDP increases by $10,000 b. U.S. consumption purchases increase by $200 and U.S. GDP increases by $200. c. U.S. consumption purchases increase by $10,200 and U.S. GDP increases by $10.200. d. U.S. consumption purchases increase by $10,000 and U.S. GDP increases by $10,200. -2. Which of the following is included in the investment component of GDP? a. spending to build new houses b. spending on business equipment such as welding equipment c. spending to build new factories AAll of the above are included in the investment component of GDP. 3. Which of the following is not included in the investment component of GDP? a. The purchase of 100 shares of stock b. The purchase of a $1000 bond c. A firm's purchase of a used van to use for deliveries. d. None of the above are included in the investment component of GDP. -4. US. GDP and U.S. GNP are related as follows: a. GNP-GDP+ Value of exported goods- Value of imported goods b. GNP -GDP+ Income earned by foreigners in the U.S.- Income earned by U.S. citizens abroad c.GNP-GDP - Income earned by foreigners in the U.S. + Income earned by U.S. citizens abroad. d. GNP GDP - Value of exported goods+ Value of imported goods. 5. Government purchases include spending on goods and services by a. federal and state govemments, but not by local governments. b. federal, state, and local governments, as well as household spending by employees of those governments. c. federal, state, and local governments. d. the federal government, but not by state or local govenments. yright Cengage Leaming Powered by CogneroExplanation / Answer
1. b. U. S. consumption purchases increase by $200 and U.S. GDP increases by $200.
(If buying of used car is included, it leads to double counting because it has been already included in the GDP of the year it was produced)
2. d. All of the above.
3. c. A firm’s purchase of a used van to use for deliveries.
4. a. GNP = GDP + Value of exported goods – Value of imported goods.
5. Federal, state, and local governments.
6. b. Real GDP was $250 and the GDP deflator was 120.
7. d. Neither Sam’s nor Ellen’s.
8. b. $11 million.
9. d. Quadruples.
10. a. 9.11; -10.69.
11. d. -6.49%, Real GDP is a better gauge of economic well-being than nominal GDP.
12. b. $1,149.
13. d. $2,315.
14. d. None of the above examples of production would be included in U.S. GDP.
15. d. A form of government spending that is not made in exchange for a currently produced good or service.
16. Constant prices.
17. d. All of the above are correct.
18. a. Remains unchanged.
19. a. Inflation rate.
20. b. Nominal GDP but not real GDP.
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