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Intermediate goods are excluded from GDP because:
A. their inclusion would involve double counting
B. they represent goods that have never been purchased so they cannot be counted
C. their inclusion would understate GDP.
D. the premise of the question is incorrect because intermediate goods are directly included in calculating GDP

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Yusra Anees
Yusra AneesLv10
16 Oct 2020

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Related questions

1. Which of the following is not an economic investment?

A. The purchase of a drill press by the Ajax Manufacturing Company.

B. The purchase of 100 shares of AT&T by a retired business executive.

C. construction of a suburban housing project.

D. The piling up of inventories on a grocer's shelf.

 

2. If the economy adds to its inventory of goods during some year:

A. Gross investment will exceed net investment by the amount of the inventory increase.

B. This amount should be ignored in calculating that year's GDP.

C. This amount should be subtracted in calculating that year's GDP.

D. This amount should be included in calculating that year's GDP.

 

3. Transfer payments are:

A. excluded when calculating GDP because they only reflect inflation.

B. excluded when calculating GDP because they do not reflect current production.

C. included when calculating GDP because they are a category of investment spending.

D. included when calculating GDP because they increase the spending of recipients.

Gross domestic product calculations count only final goods and services because:

A) these are the only goods and services that are purchased in an economy.

B) counting all goods and services would lead to double-counting of many activities.

C) it is difficult to measure the prices of intermediate goods produced.

D) one cannot calculate the quantities of intermediate goods produced.

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.

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