c Forecasting gauge d index of leading indicators et transactions of final goods

Question

c Forecasting gauge d index of leading indicators et transactions of final goods and services are excluded ettes Purchases of products such as wine, beer, hard liquor, and cigar b. 6 Which of the following mark from the computation of U.S. GDP? a. Secondhand transactions, such as when a used car is sold e New purchase that a resident of one state makes in a different state d. Purchases of necessities such as groceries and rent ments to households not in exchange for goods and services currently produced are a. Transfer payments b. Government purchases c. Consumption expenditures d Investment expenditures 8 Consumption spending includes Durable goods, nondurable goods, and housing a. b. c. d. e. Durable goods, nondurable goods, and imports Durable goods, services, and housing Durable goods, nondurable goods, and services Nondurable goods, services, and housing 9. The circular flow of economic activity is a model of the: Flow of goods, resources, payments, and expenditures between the sectors of the economy a. b. Influence of government on business behavion Influence of business on consumers Role of unions and government in the economy c. d. 10. Suppose that last year you borrowed $100 at 5 percent interest to purchase a $100 pair of Nike cross-training shoes. This year you repaid the bank with interest. If the inflation rate was 10 percent last year, your purchase of the shoes would: Make you an inflation winner as you saved $5 on the shoes a. b. Make you an inflation loser as you paid $5 more than you should have for the shoes Not be affected at all by the inflation rate Be taxed according to COLA adjustments Make you an inflation loser because of bracket creep c. d. e. 11. Suppose that the consumer price index of a country was 160 at Year X and 168 at the end of Year Y. What was the country's inflation rate during Year Y? a. 5 percent b. 8 percent

Explanation / Answer

There are too many parts in question, we are allowed to do only 4 parts. Here i have solved 6 questions for you.

others you can submit as seperate question

1). Which of the following market transactions of final goods and services are excluded from the computation of U.S. GDP?

Solution option b) Second hand transactions. Secondhand sales are excluded because no production is involved except for the sales service.

2). Payments to households not in exchange for goods and services currently produced are:

Sol – a) Transfer Payments

3) Consumption spending includes:

Sol – c) Durable goods, services and housing

4). Circular flow of the economic activity is a model of the

Sol – a) Flow of goods, services, and payments between households and firms

5) Suppose that last year you borrowed $100 at 5 percent interest to purchase a $100 pair of Nike cross-training shoes. This year you repaid the bank with interest. If the inflation rate was 10 percent last year, your purchase of the shoes would:

a)Make you an inflation winner as you saved $5 on the shoes.

b)Make you an inflation loser as you paid $5 more than you should have for the shoes.

c)Not be affected at all by the inflation rate.

Sol - a) Make you an inflation winner as you saved $5 on the shoes

Reason –

Cost = 100+5 (interest) = 105 USD

Real cost = 100 + 10 (inflation) = 110

Savings = 110 – 105 = 5 USD

6) Suppose that the consumer price index of a country was 160 at Year X and 168 at the end of Year Y. What was the country`s inflation rate during Year Y?

Sol – 5%

Reason 168 – 160 = 8

% change = 8/160 = 0.05 or 5 percent

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