Deck 23: 2: Sec 232 Mc the Measurement of Gdp

Question 1

GDP is defined as the

A)value of all goods and services produced within a country in a given period of time.
B)value of all goods and services produced by the citizens of a country,regardless of where they are living,in a given period of time.
C)value of all final goods and services produced within a country in a given period of time.
D)value of all final goods and services produced by the citizens of a country,regardless of where they are living,in a given period of time.

Answer 1

B

Question 2

Suppose an apartment complex converts to a condominium,so that the former renters are now owners of their housing units.Suppose further that a current estimate of the value of the condominium owners' housing services is the same as the rent they previously paid.What happens to GDP as a result of this conversion?

A)GDP necessarily increases.
B)GDP necessarily decreases.
C)GDP is unaffected because neither the rent nor the estimate of the value owner-occupied housing services is included in GDP.
D)GDP is unaffected because previously the rent payments were included in GDP and now the rent payments are replaced in GDP by the estimate of the value of owner occupied housing services.

Answer 2

C

Question 3

Estimates of the values of which of the following non-market goods or services are included in GDP?

A)unpaid housework but not the rental value of owner-occupied homes.
B)the rental value of owner-occupied homes but not unpaid housework.
C)unpaid housework and the rental value of owner-occupied homes.
D)Neither unpaid housework nor the rental value of owner-occupied homes.

Answer 3

B

Question 4

Which of the following is included in GDP?

A)the market value of rental housing services,but not the market value of owner-occupied housing services.
B)the market value of owner-occupied housing services,but not the market value of rental housing services
C)both the market value of rental housing services and the market value of owner-occupied housing services
D)neither the market value of owner-occupied housing services nor the market value of rental housing services.

Question 5

Estimates of the values of which of the following non-market goods or services are included in GDP?

A)the value of unpaid housework
B)the value of services provided by major household appliances purchased in a previous period
C)the estimated rental value of owner-occupied homes
D)All of the above are included in GDP.

Question 6

Gross domestic product adds together many different kinds of goods and services into a single measure of the value of economic activity.To do this,GDP makes use of

A)market prices.
B)statistical estimates of the value of goods and services to consumers.
C)prices based on the assumption that producers make no profits.
D)the maximum amount consumers would be willing to pay.

Question 7

Ryan lives in an apartment where he pays $7,000 a year in rent.Sarah lives in a house that could be rented for $21,000 a year.How much do these housing services contribute to GDP?

A)$21,000
B)$28,000
C)$7,000
D)$14,000

Question 8

Which of the following is a way to compute GDP?

A)add up the wages paid to all workers
B)add up the quantities of all final goods and services
C)add up the market values of all final goods and services
D)add up the difference between the market values of all final goods and services and then subtract the costs of producing those goods and services

Question 9

GDP includes the value of all

A)final goods and services produced within a country using primarily market prices to measure the value of goods and services.
B)final goods and services produced within a country using primarily a survey of consumers to measure the value of goods and services.
C)goods and services produced within a country using primarily market prices to measure the value of goods and services.
D)goods and services produced within a country using primarily a survey of consumers to measure the value of goods and services.

Question 10

Which of the following is included in the calculation of GDP?

A)The purchase of tutoring services from a tutor who holds citizenship outside the country but resides within the country.
B)The purchase of a new edition of a foreign textbook that was produced in a different nation.
C)The purchase of ink and paper supplies by a textbook company for the production of new textbooks.
D)The purchase of a used textbook from a friend who took the same class last year.

Question 11

If the price of a dress is three times the price of a pair of shoes,then a pair of shoes contributes

A)exactly one-third as much to GDP as does a dress.
B)more than one-third as much to GDP as does a dress.
C)less than one-third as much to GDP as does a dress.
D)exactly one-fourth as much to GDP as does a dress.

Question 12

Suppose that an economy produces 30,000 units of good A which sells at $3 a unit and 60,000 units of good B which sells at $2 per unit.Production of good A contributes

A)1/2 times as much to GDP as the production of good B.
B)3/2 times as much to GDP as the production of good B.
C)3/4 times as much to GDP as the production of good B.
D)4/3 times as much to GDP as production of good B.

Question 13

The value of the housing services provided by the economy's owner-occupied houses is

A)included in GDP,and the estimated rental values of the houses are used to place a value on these housing services.
B)included in GDP,and the actual mortgage payments made on the houses are used to estimate the value of these rental services.
C)excluded from GDP since these services are not sold in any market.
D)excluded from GDP since the value of these housing services cannot be estimated with any degree of precision.

Question 14

James owns two houses.He rents one house to the Johnson family for $10,000 per year.He lives in the other house.If he were to rent the house in which he lives,he could earn $12,000 per year in rent.How much do the housing services provided by the two houses contribute to GDP?

A)$0
B)$10,000
C)$12,000
D)$22,000

Question 15

Which of the following is a way to compute GDP?

A)total income earned.
B)total expenditures on final goods.
C)add up the market values of all final goods and services.
D)All of the above are correct.

Question 16

Most goods and services produced at home

A)and most goods and services produced illegally are included in GDP.
B)are included in GDP while most goods and services produced illegally are excluded from GDP.
C)are excluded from GDP while most goods and services produced illegally are included in GDP
D)and most goods and services produced illegally are excluded from GDP.

Question 17

Suppose that an economy produces 20,000 units of good A which sells at $3 a unit and 40,000 units of good B which sells at $1 per unit.Production of good A contributes

A)1/3 times as much to GDP as the production of good B.
B)3/2 times as much to GDP as the production of good B.
C)3 times as much to GDP as the production of good B.
D)2/3 times as much to GDP as production of good B.

Question 18

In order to include many different goods and services in an aggregate measure,GDP is computed using,primarily,

A)values of goods and services based on surveys of consumers.
B)market prices.
C)quantities purchased by a typical urban household.
D)profits from producing goods and services.

Question 19

In computing GDP,market prices are used to value final goods and services because

A)market prices do not change much over time,so it is easy to make comparisons between years.
B)market prices reflect the values of goods and services.
C)market prices reflect the quantity sold.
D)None of the above is correct;market prices are not used in computing GDP.

Question 20

GDP excludes most items that are produced and sold illegally and most items that are produced and consumed at home because

A)the quality of these items is not high enough to contribute value to GDP.
B)measuring them is so difficult.
C)the government wants to discourage the production and consumption of these items.
D)these items are not reported on income tax forms.

Question 21

A farmer sells five pounds of pecans to a Smith's Fresh Pecans for $10.Smith's Fresh Pecans resells three pounds for $4.50 per pound.The remaining pecans are shelled and canned and sold for a total of $8.00 Taking these transactions into account,how much is added to GDP?

A)$22.50
B)$29.50
C)$21.50
D)$31.50

Question 22

Which of the following is included in GDP?

A)marijuana purchased legally in Colorado.
B)marijuana purchased illegally from a drug dealer.
C)marijuana produced and consumed by a man in his attic
D)All of the above are included in GDP.

Question 23

Which of the following is not included in GDP?

A)carrots grown in your garden and eaten by your family
B)carrots purchased at a farmer's market and eaten by your family
C)carrots purchased at a grocery store and eaten by your family
D)None of the above are included in GDP.

Question 24

Darin grows and sells marijuana to Jennifer.Thomas is an organic farmer who sells broccoli to Jennifer.Marijuana is an illegal good and broccoli is a legal good.Assume that if Jennifer marries either,they give her what they used to sell her.Which of the following statements is consistent with the way GDP is computed?

A)GDP will fall if Jennifer marries either Darin or Thomas.
B)GDP will fall if Jennifer marries Darin but not if she marries Thomas.
C)GDP will fall if Jennifer marries Thomas but not if she marries Darin.
D)GDP remains the same whether Jennifer marries Darin or Thomas.

Question 25

Over time,people have come to rely more on market-produced goods and services and less on goods and services they produce for themselves.For example,busy people with high incomes,rather than cleaning their own houses,hire people to clean their houses.By itself,this change has

A)caused measured GDP to fall.
B)not caused any change in measured GDP.
C)caused measured GDP to rise.
D)probably changed measured GDP,but in an uncertain direction;the direction of the change depends on the difference in the quality of the cleaning that has resulted.

Question 26

A farmer produces oranges and sells them to Fresh Juice,which makes orange juice.The oranges produced by the farmer are called

A)inventory goods.
B)transitory goods.
C)final goods.
D)intermediate goods.

Question 27

Grapes are considered intermediate goods

A)whether the purchaser uses them to make wine to sell or eats them.
B)if the purchaser uses them to make wine to sell others but not if the purchaser eats them.
C)if the purchaser eats them,but not if the purchaser uses to them to make wine to sell.
D)None of the above is correct.

Question 28

Al's Aluminum Company sells $1 million worth of aluminum to Shiny Foil Company,which uses the aluminum to make aluminum foil.Shiny Foil Company sells $4 million worth of aluminum foil to households.The transactions just described contribute how much to GDP?

A)$1 million
B)$3 million
C)$4 million
D)$5 million

Question 29

Joe and Jim purchase vegetables at a grocery store,but Jim also grows vegetables in his back yard.Regarding these two practices,which of the following statements is correct?

A)Only Joe's grocery store purchases are included in GDP.
B)Only Joe's and Jim's grocery store purchases are included in GDP.
C)Joe's and Jim's grocery store purchases are included in GDP.The vegetables from Jim's backyard garden are included at their market value.
D)Joe's and Jim's grocery store purchases are included in GDP.The vegetables from Jim's backyard garden are included at their market value,if Jim provides this information.

Question 30

Susan switches from going to Speedy Lube for an oil change to changing the oil in her car herself.Which of the following is correct? The value of changing the oil is

A)included in GDP whether Susan pays Speedy Lube to change it or changes it herself.
B)included in GDP if Susan pays Speedy Lube to change it but not if she changes it herself.
C)included in GDP if Susan changes it herself,but not if she pays Speedy Lube to change it.
D)not included in GDP whether Susan pays Speedy lube to change it or she changes it herself.

Question 31

If a state made a previously-illegal activity,such as gambling or prostitution,legal,then,other things equal,GDP

A)decreases.
B)increases.
C)doesn't change because both legal and illegal production are included in GDP.
D)doesn't change because these activities are never included in GDP.

Question 32

One bag of flour is sold for $1.00 to a bakery,which uses the flour to bake bread that is sold for $3.00 to consumers.A second bag of flour is sold for $1 to a grocery store who sells it to a consumer for $2.00.Taking these four transactions into account,what is the effect on GDP?

A)GDP increases by $3.00.
B)GDP increases by $5.00.
C)GDP increases by $6.00.
D)GDP increases by $7.00.

Question 33

Gasoline is considered a final good if it is sold by a

A)gasoline station to a bus company that operates a bus route between San Francisco and Los Angeles.
B)pipeline operator to a gasoline station in San Francisco.
C)gasoline station to a motorist in Los Angeles.
D)All of the above are correct.

Question 34

The purchase of rice produced this period is included in GDP if the rice is

A)used in a meal a restaurant sells during the same period they buy the rice.
B)purchased by a family who uses it to make tuna casserole for its supper.
C)purchased by a frozen food company to increase its inventory.
D)B and C are correct.

Question 35

Over the last few decades,Americans have chosen to cook less at home and eat more at restaurants.This change in behavior,by itself,has

A)reduced measured GDP.
B)not affected measured GDP.
C)increased measured GDP by the value of the restaurant meals.
D)increased measured GDP by the value added by the restaurant's preparation and serving of the meals.

Question 36

Sam,an American citizen,prepares meals for his family at home.Ellen,a Canadian citizen,commutes to the U.S.to help prepare meals at a restaurant in Idaho.Whose value of services preparing meals is included in U.S.GDP?

A)Sam's and Ellen's.
B)Sam's but not Ellen's.
C)Ellen's but not Sam's.
D)Neither Sam's nor Ellen's.

Question 37

A farmer sells $25,000 worth of apples to individuals who take them home to eat,$50,000 worth of apples to a company that uses them all to produce cider,and $75,000 worth of apples to a grocery store that will sell them to households.How much of the farmer's sales will be included as apples in GDP?

A)$25,000
B)$150,000
C)$100,000
D)$125,000

Question 38

A professional gambler moves from a state where gambling is illegal to a state where gambling is legal.Most of his income was,and continues to be,from gambling.His move

A)raises GDP.
B)decreases GDP.
C)doesn't change GDP because gambling is never included in GDP.
D)doesn't change GDP because in either case his income is included.

Question 39

A steel company sells some steel to a bicycle company for $150.The bicycle company uses the steel to produce a bicycle,which it sells for $250.Taken together,these two transactions contribute

A)$150 to GDP.
B)$250 to GDP.
C)between $250 and $400 to GDP,depending on the profit earned by the bicycle company when it sold the bicycle.
D)$400 to GDP.

Question 40

Rachel cuts her sister's hair for free.When she cuts the hair of her customers in her shop,she charges $10.When is Rachel's haircutting included in GDP?

A)When she cuts her sister's hair or cuts her customers' hair.
B)When she cuts her sister's hair,but not her customers' hair.
C)When she cuts her customers' hair,but not her sister's.
D)Never.

Question 41

A dairy buys $50,000 worth of milk and spend $5,000 on cartons and utilities.It sells the cartons of milk to a grocery store for $60,000 that then sells all of the cartons to consumers for $65,000.How much do these actions add to GDP?

A)$55,000
B)$65,000
C)$120,000
D)None of the above are correct.

Question 42

Gross domestic product includes all

A)legal and illegal final goods,but it excludes all legal and illegal final services.
B)legal and illegal final goods and all legal and illegal final services.
C)legal final goods and services,but it excludes illegal final goods and services.
D)legal and illegal final goods and legal final services,but it excludes illegal final services.

Question 43

Which of the following transactions is not included in GDP?

A)oranges sold to households by a grocer.
B)orange juice sold by a restaurant to its diners.
C)oranges sold by a farmer to a grocery store.
D)All of the above are included in GDP.

Question 44

Transactions involving items produced in the past,such as the sale of a 5-year-old automobile by a used car dealership or the purchase of an antique rocking chair by a person at a yard sale,are

A)included in current GDP because GDP measures the value of all goods and services sold in the current year.
B)included in current GDP but valued at their original prices.
C)not included in current GDP because it is difficult to determine their value.
D)not included in current GDP because GDP only measures the value of goods and services produced in the current year.

Question 45

Suppose there are only two firms in an economy: Cowhide,Inc.produces leather and sells it to Couches,Inc. ,which produces and sells leather furniture.With each $1,000 worth of leather that it buys from Cowhide,Inc. ,Couches,Inc.produces a couch and sells it for $2,600.Neither firm had any inventory at the beginning of 2015.During that year,Cowhide produced enough leather for 25 couches.Couches,Inc.bought 80% of that leather for $20,000 and promised to buy the remaining 20% for $5,000 in 2016.Couches,Inc.produced 20 couches during 2015 and sold each one during that year for $2,600.What was the economy's GDP for 2015?

A)$25,000
B)$52,000
C)$57,000
D)$65,000

Question 46

An automobile factory in Michigan uses $100,000 worth of parts purchased from foreign countries along with U.S.inputs to produce 30 cars worth $20,000 each.Twenty of these cars are sold and 10 are left in inventory.How much did these actions add to GDP?

A)$300,000
B)$500,000
C)$600,000
D)$700,000

Question 47

A newspaper article informs you that most businesses reduced production in the last quarter but also sold from their inventories during the last quarter.Based on this information GDP likely

A)increased.
B)decreased.
C)stayed the same.
D)may have increased,decreased,or stayed the same.

Question 48

Janet bought flour and used it to bake bread she ate.ABC Bakery bought flour which it used to bake bread that customers purchased.In which case will the flour be counted as a final good?

A)Janet's purchase and ABC Bakery's purchase.
B)ABC Bakery's purchase but not Janet's purchase.
C)Janet's purchase but not ABC Bakery's purchase.
D)Neither Janet's purchase nor ABC Bakery's purchase.

Question 49

In 2014,a farmer grows and sells $3 million worth of corn to Big Flakes Cereal Company.Big Flakes Cereal Company produces $8 million worth of cereal in 2014,with sales to households during the year of $7 million.The unsold $1 million worth of cereal remains in Big Flake Cereal Company's inventory at the end of 2014.The transactions just described contribute how much to GDP for 2014?

A)$3 million
B)$7 million
C)$8 million
D)$11 million

Question 50

A U.S.-owned car factory in Mexico produces $5 million of cars.$2.5 million of these cars are sold in Mexico and the other $2.5 million are sold in the U.S.In both cases $1 million of the value of the cars was due to U.S-owned equipment located in Mexico and U.S.managers working in Mexico.How much did this production contribute to U.S.GDP?

A)$0
B)$1 million
C)$2 million
D)None of the above are correct

Question 51

A painter pays $500 for paint he uses to repaint a house.He then presents a bill for $1200 that covers his time and expenses to the homeowner.How much do these transactions add to GDP?

A)$500
B)$700
C)$1200
D)$1700

Question 52

Wholesome Wheat Bakery buys $10.00 worth of flour from Mikes' Mill and uses the flour to make bread.Wholesome Wheat sells the bread to the public for $22.00.Taking these two transactions into account,what is the effect on GDP?

A)GDP increases by $10.00
B)GDP increases by $12.00
C)GDP increases by $22.00
D)GDP increases by $32.00

Question 53

Which of the following domestically produced items is not included in GDP?

A)a bottle of shampoo
B)a hairdryer
C)a haircut
D)All of the above are included in GDP.

Question 54

A tire manufacturer produces 400 tires valued at $20 each.Three hundred tires are sold to a tire shop,which then sells them to households for $50 each.The remaining tires are unsold and are added to the tire manufacturer's inventory.How much is added to GDP?

A)$8,000
B)$15,000
C)$17,000
D)$13,000

Question 55

Fine Edge manufactures lawn mowers.In 2014 it had $2 million worth of lawn mowers in inventory.In 2015 it sold $10 million worth of lawn mowers to consumers and had $1 million worth of lawn mowers in inventory.How much did the lawn mowers produced by Fine Edge add to GDP in 2015?

A)$11 million
B)$10 million
C)$7 million
D)$9 million

Question 56

Tim mows the yard for his neighbors.He spends $1 on gas and charges them $20 for each lawn he mows.What's the total contribution to GDP each time Tim mows a yard?

A)$1
B)$19
C)$20
D)$21

Question 57

Which of the following transactions would be included in GDP for 2015?

A)In February 2015,Amanda sells a 2009 Hyundai to Isabella.
B)In March 2015,Amanda buys a ticket to visit a zoo in Florida.She visits the zoo in February 2016.
C)In November 2015,Isabella eats onions that she harvested from her backyard garden in October 2015.
D)All of the above are correct.

Question 58

Jennifer lives in a home that was newly constructed in 2011 for which she paid $240,000.In 2014 she sold the house for $260,000.Which of the following statements is correct regarding the sale of the house?

A)The 2014 sale increased 2014 GDP by $260,000 and had no effect on 2011 GDP.
B)The 2014 sale increased 2014 GDP by $20,000 and had no effect on 2011 GDP.
C)The 2014 sale increased 2014 GDP by $260,000;furthermore,the 2014 sale caused 2011 GDP to be revised upward by $20,000.
D)The 2014 sale affected neither 2014 GDP nor 2011 GDP.

Question 59

Which of the following is not included in GDP?

A)a can of bug spray
B)the services of an exterminator
C)the honey produced and sold by a beekeeper
D)All of the above are included in GDP.

Question 60

Suppose there are only two firms in an economy: Rolling Rawhide produces rawhide and sells it to Chewy Chomp,Inc. ,which uses the rawhide to produce and sell dog chews.With each $1 worth of rawhide that it buys from Rolling Rawhide,Chewy Chomp,Inc.produces a dog chew and sells it for $2.50.Neither firm had any inventory at the beginning of 2014.During that year,Rolling Rawhide produced enough rawhide for 2000 dog chews.Chewy Chomp,Inc.bought 90% of that rawhide for $1800 and promised to buy the remaining 10% for $200 in 2015.Chewy Chomp,Inc.produced 1800 dog chews during 2014 and sold each one during that year for $2.50.What was the economy's GDP for 2014?

A)$3,800
B)$4,500
C)$4,700
D)$5,000

Question 61

Consider two cars manufactured by Chevrolet in 2014.During 2014,Chevrolet sells one of the two cars to Emily for $20,000.Later in the same year,Emily sells the car to Jim for $18,000.The second automobile,with a market value of $19,000,is unsold at the end of 2014 and it remains in Chevrolet's inventory.The transactions just described contribute how much to GDP for 2014?

A)$20,000
B)$37,000
C)$38,000
D)$39,000

Question 62

An American company operates a fast food restaurant in Paris,France.Which of the following statements is accurate?

A)The value of the goods and services produced by the restaurant is included in both French GDP and U.S.GDP.
B)The value added by American workers and equipment in France is included in U.S.GDP and the value added by French workers and equipment is added to French GDP.
C)The value of the goods and services produced by the restaurant is included in French GDP,but not in U.S.GDP.
D)The value of the goods and services produced by the restaurant is included in U.S.GDP,but not in French GDP.

Question 63

Which of the following values would be included in U.S.GDP for 2015?

A)the rent that Sam,an American citizen,would have paid on his home in Houston in 2015 had he not owned that home.
B)the rent that Jim,an American citizen,paid on his apartment in San Francisco in 2015.
C)the value of the legal services provided by Juan,an attorney and a Mexican citizen,who lived in San Antonio and practiced law there in 2015
D)All of the above would be included in U.S.GDP for 2015.

Question 64

Which of the following items is included in U.S.GDP?

A)final goods and services that are purchased by the U.S.federal government
B)intermediate goods that are produced in the U.S.but that are unsold at the end of the GDP accounting period
C)goods and services produced by foreign citizens working in the U.S.
D)All of the above are included in U.S.GDP.

Question 65

Quality Motors is a Japanese-owned company that produces automobiles;all of its automobiles are produced in American plants.In 2008,Quality Motors produced $25 million worth of automobiles and sold $12 million in the U.S.and $13 million in Mexico.In addition,it sold $2 million from the previous year's inventory in the U.S.The transactions just described contribute how much to U.S.GDP for 2008?

A)$12 million
B)$14 million
C)$25 million
D)$27 million

Question 66

Which of the following items is included in U.S.GDP?

A)goods produced by foreign citizens working in the United States
B)the difference in the price of the sale of an existing home and its original purchase price
C)known illegal activities
D)None of the above is included in U.S.GDP.

Question 67

The Patersons bought a home that was newly constructed in 2007 for $275,000.They sold the home in 2015 for $255,000.Which of the following statements is correct regarding the sale of the house?

A)The 2015 sale increased 2015 GDP by $255,000 and had no effect on 2007 GDP.
B)The 2015 sale reduced 2015 GDP by $20,000 and had no effect on 2007 GDP.
C)The 2015 sale increased 2015 GDP by $255,000;and caused 2007 GDP to be revised downward by $20,000.
D)The 2015 sale affected neither 2007 GDP nor 2015 GDP.

Question 68

Tyler and Camille both live in Oklahoma.A new-car dealer in Oklahoma bought a new car from the manufacturer for $18,000 and sold it to Tyler for $22,000.Later that year,Tyler sold the car to Camille for $17,000.By how much did these transactions contribute to U.S.GDP for the year?

A)$18,000
B)$22,000
C)$39,000
D)$57,000

Question 69

Michigan Cranberry Company sold $10 million worth of cranberries it produced.In producing cranberries,it purchased $1 million dollars worth of supplies from foreign countries and paid workers who reside in Canada but commute to the U.S.$1 million.How much did these transactions add to U.S.GDP?

A)$12 million
B)$11 million
C)$10 million
D)$9 million

Question 70

Which of the following is not included in U.S.GDP?

A)additions of newly produced output to inventory
B)production of U.S citizens working in foreign countries.
C)the estimated rental value of owner-occupied housing
D)the value of food purchased from a grocery store to make meals at home without pay

Question 71

Which of the following is included in Singapore's GDP?

A)The value of production by a Singaporean working in the U.S.
B)The value of production by an American working in Singapore
C)The value of production by a Singaporean that crosses the border to work in Malaysia.
D)All of the above are correct.

Question 72

Which of the following is not included in U.S.GDP?

A)The market value of an oil change that Ben performs on his own car.
B)The market value of an oil change at Speedy Lube.
C)The market value of oil purchased by Ben.
D)Production of foreign citizens living in the United States that work in an oil packaging facility.

Question 73

Sheri,a U.S.citizen,works only in Germany.The value she adds to production in Germany is included

A)in both German GDP and U.S.GDP.
B)in German GDP,but is not included in U.S.GDP.
C)in U.S.GDP,but is not included in German GDP.
D)in neither German GDP nor U.S.GDP.

Question 74

AA Appliances sells refrigerators.In 2015 it added $100,000 to its inventory.$10,000 of this addition was from used refrigerators,and the remaining $90,000 was from their purchases of newly manufactured refrigerators.How much of AA's inventory is included in 2015 GDP?

A)$0
B)$10,000
C)$90,000
D)$100,000

Question 75

Quality Motors is a Japanese-owned company that produces automobiles;all of its automobiles are produced in American plants.In 2010 Quality Motors produced $30 million worth of automobiles,with $17 million in sales to Americans,$9 million in sales to Canadians,and $4 million worth of automobiles added to Quality Motors' inventory.The transactions just described contribute how much to U.S.GDP for 2010?

A)$17 million
B)$21 million
C)$26 million
D)$30 million

Question 76

In early 2010 Molly paid $200,000 for a house built in 2000.She spent $30,000 on new materials to remodel the house.Although Molly lived in the house after she remodeled it,its rental value rose.Which of the following contributed to real GDP in 2010?

A)the price of the house,the cost of remodeling materials,the increase in rental value
B)the price of the house and the cost of remodeling materials,but not the increase in rental value
C)the costs of the remodeling materials and the increase in rent,but not the price of the house
D)None of the above are correct.

Question 77

Martin,a U.S.citizen,travels to Mexico and buys a newly manufactured motorcycle made there.His purchase is included in

A)both Mexican GDP and U.S.GDP.
B)Mexican GDP,but it is not included in U.S.GDP.
C)U.S.GDP,but it is not included in Mexican GDP.
D)neither Mexican GDP nor U.S.GDP.

Question 78

Tom and Lilly rented a house for $12,000 last year.At the start of the year they bought the house they had been renting directly from the owner for $250,000.They believe they could rent it for $12,000 this year,but stay in the house.How much does Tom and Lilly's decision to buy the house change GDP?

A)it reduces GDP by $12,000
B)it does not change GDP
C)it raises GDP by $238,000
D)it raises GDP by $250,000

Question 79

Which of the following items is included in U.S.GDP?

A)the estimated value of production accomplished at home,such as backyard production of fruits and vegetables
B)the value of illegally-produced goods and services
C)the value of cars and trucks produced in foreign countries and sold in the U.S.
D)None of the above is included in U.S.GDP.

Question 80

Sally purchased a log-splitter five years ago.This year,she purchases some new parts,gasoline,oil,and spends 2 hours repairing the log-splitter.Which of the following is included in this year's GDP?

A)the amount she paid to buy the new parts
B)the amount she paid to buy new parts and gasoline
C)the amount she paid to buy new parts,gasoline,and oil.
D)the amount she paid to buy new parts,gasoline,oil,and the market value of the 2 hours spent to repair the log-splitter.