🏷️ LIMITED TIME OFFER: GET 20% OFF GRADE+ YEARLY SUBSCRIPTION →
Log in
Economics
1
answer
0
watching
144
views

Economists include only final goods and services when measuring GDP for a particular year because:
 
a. if intermediate goods were not counted, then multiple counting would occur.

b. if intermediate goods were not counted, then prices would be overstated.

c. if intermediate goods were counted, then multiple counting would occur.

d. if intermediate goods were counted, then prices would be overstated.

Watch
1
answer
0
watching
144
views

For unlimited access to Homework Help, a Homework+ subscription is required.

Sonia Dhawan
Sonia DhawanLv10
17 Oct 2020

Unlock all answers

Get 1 free homework help answer.
Already have an account? Log in
Share

Related textbook solutions

Principles of Economics
2nd Edition, 2017
Openstax
ISBN: 9781947172364
Principles of Macroeconomics
2 Edition,
Openstax
ISBN: 9781947172388
Principles of Microeconomics
2 Edition,
Openstax
ISBN: 9781947172340

Related questions

Which of the following is an example of a tight monetary policy?

(a) an increase in the reserve requirement

(b) a decrease in the discount rate

(c) a decrease in the federal funds rate

(d) the Fed buying government securities in the open market

 

 

The interest rate that banks are charged when they borrow reserves (overnight) from other commercial banks is the

(a) commercial paper rate.

(b) discount rate.

(c) federal funds rate.

(d) prime rate.

 

toy store adds bicycles to its inventory in 2012 in anticipation of an increased demand for bicycles. But the store is not able to sell the bicycles in 2012. The bicycles the toy store added to its inventory will

(a) not be counted in 2012 GDP, because they were not sold in 2012.

(b) be counted in 2012 GDP as a durable consumption expenditure.

(c) be counted in 2012 GDP as part of gross private domestic investment.

(d) not be counted in 2012 GDP because they are intermediate goods.

 

In 2010 final sales equal $110 billion and the change in business inventories is a negative $10 billion. GDP in 2010 is

(a) $110 billion.

(b) $120 billion.

(c) $100 billion.

For each of the following transactions, first circle Yes/No.

Then explain by stating a clear reason based on what is counted, and not counted, and which category of GDP it would be counted in (or excluded from). GDP year is 2014.

a. Chinese manufacturer opens a factory in the state of Massachusetts to build new subway cars for the MBTA in 2014.

Yes/ No

Counted where/ category:

____________________________________________________________________________________________________________________________________

b. You buy a new pair of pants in 2014 at the retail store Target which has label that reads ‘made and assembled in El Salvador’. To clearly shown if this item is counted or not, your answer should clearly specify the two places in GDP equation this item relates to.

Yes/ No

Counted where/ category:

___________________________________________________________________________________________________________________________________________

c. A Ford dealership in Ohio has 15 unsold new 2014 model cars at the end of 2014.

Yes/ No

Counted where/ category:

________________________________________________________________________________________________________

1. What does the investment component of GDP measure?

a. spending by households on goods and services

b. spending by government agencies on goods and services

c. spending on goods to be used in future production

d. spending on domestically produced goods by foreign buyers

 

2. A good produced in the current time period but put into a firm's inventory instead of being sold

a. is only included as a part of consumption in future GDP when it is sold.

b. is counted as consumption in the current GDP since it was produced in the current time period.

c. is excluded from the current GDP.

d. is considered unsold inventory and counted as a part of the investment in current GDP.

Weekly leaderboard

Home
Homework Help 3,900,000
Economics 400,000
Start filling in the gaps now
Log in