Question 1

Which of the following is not an example of a durable good?

Accepted Answer

Durable goods are tangible items that are expected to last at least three years of regular use. A business suit is a consumer good but not a durable good since it is not expected to last at least three years.

Question 2

Which of the following is included in the investment component of GDP?

Accepted Answer

All of the above options are included in the investment component of GDP. Household purchases of newly constructed homes are included in residential investment, net additions to firms' inventories are included in inventory investment, and firms' purchases of capital equipment are included in business investment.

Question 3

John buys a used car for $5,400 and spends $600 on new parts,made in the U.S. ,to fix the car.The end result of these two transactions is

Accepted Answer

The answer of John buys a used car for $5,400...

Question 4

Consider two items that might be included in GDP: (1)the estimated rental value of owner-occupied housing and (2)purchases of newly-constructed homes.How are these two items accounted for when GDP is calculated?

Accepted Answer

(1) The estimated rental value of owner-occupied housing is included in the consumption component of GDP because it is considered a service that is consumed by households. However, since the owners are technically both the consumers and the producers of this service, the estimated value is calculated as imputed rent and included in GDP as part of the consumption component.
(2) Purchases of newly-constructed homes are included in the investment component of GDP because they are considered a form of investment in real estate. This is because they are not considered a final consumption good, but rather a capital good that is expected to generate a stream of income for the owner in the form of rent or resale value.

Question 5

When economists refer to intangible items,they are referring to such things as

Accepted Answer

The answer of When economists refer to intangible items,they are...

Question 6

If you buy a burger and fries at your favorite fast food restaurant,

Accepted Answer

When you buy a burger and fries at a fast food restaurant, both GDP and consumption spending will increase since you are spending money on goods and services that are produced and sold. Hence, option D is correct.

Question 7

What word do economists use to refer to the purchase of goods that will be used in the future to produce more goods and services?

Accepted Answer

Economists use the term "investment" to refer to the purchase of goods that will be used in the future to produce more goods and services. Capital refers to the tools, equipment, buildings, and other assets used in production, which are typically acquired through investment. Consumption refers to the purchase of goods and services for immediate enjoyment or use. Costs refer to the expenses incurred in producing goods and services.

Question 8

Which of the following is not an example of a nondurable good?

Accepted Answer

Nondurable goods are items that are consumed or used up relatively quickly, usually within three years or less. A microwave is a durable good because it is meant to last for several years. The other options, a loaf of bread, a pair of jeans, and a pound of bacon are all examples of nondurable goods because they are consumed or worn out relatively quickly.

Question 9

Which of the following is included in the investment component of GDP?

Accepted Answer

The investment component of GDP includes spending on all types of fixed capital, including spending to build new houses, spending to build new factories, and spending on business equipment such as welding equipment.

Question 10

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

Accepted Answer

The answer of Which of the following is included in...

Question 11

Which of the following is an example of a durable good?

Accepted Answer

Durable goods are products that are long-lasting, providing utility to the consumer for an extended period of time. A refrigerator is a good example of a durable good because it can last for several years and provides value to the consumer over a long period of time. The other options, such as a quart of motor oil, a business suit, and a can of soup, are not examples of durable goods as they are either consumable or have a shorter lifespan.

Question 12

Which of the following is included in the investment component of GDP?

Accepted Answer

The investment component of GDP includes spending on new business equipment such as power tools, as this represents investment in productive capacity. However, spending on stocks and bonds does not represent direct investment in production, so it is not included in the investment component of GDP.

Question 13

Which of the following items is the one type of household expenditure that is categorized as investment rather than consumption?

Accepted Answer

The purchase of a new house is categorized as investment because it is an asset that will appreciate in value over time. Spending on education is considered human capital investment but is still categorized as consumption. The purchase of stocks and bonds may also be categorized as investment, but it is not a household expenditure per se. The purchase of durable goods may provide some future value but is still considered consumption.

Question 14

Which of the following examples of household spending is categorized as investment rather than consumption?

Accepted Answer

Expenditures on new housing are categorized as investment because they are expected to generate income or a return in the future, such as through rental income or capital gains. Expenditures on durable goods and intangible items are categorized as consumption because they are used up in the current period and do not generate future income or returns.

Question 15

Household spending on education is included in

Accepted Answer

Household spending on education is considered as a consumption expenditure in national accounts, as it is considered as a purchase of a service for immediate use by households. However, it may also be argued that it has long-term benefits, making it an investment. Nonetheless, it is still classified as consumption expenditure in GDP calculations.

Question 16

A U.S.publisher purchases new computers that were manufactured in the U.S.This purchase by itself makes

Accepted Answer

This purchase contributes to investment as it involves the acquisition of new computers, and it also contributes to GDP as it is a domestic purchase. Therefore, choice A) is the best answer.

Question 17

The Carters' oldest son attends Big State University.He and his parents pay all his fees and tuition.These payments count in GDP as

Accepted Answer

The payment of fees and tuition by the Carters for their son's education at Big State University counts as consumption of services because it is an expenditure on an intangible service provided by the university. It is not counted as investment because it is not being used to produce goods or services for future consumption, and it is not government spending because it is not being done by a government entity. It is also not consumption of durable goods because it is not an expenditure on a physical product that lasts for a long time.

Question 18

For the purpose of calculating GDP,investment is spending on

Accepted Answer

Investment, for the purpose of calculating GDP, refers to spending on capital equipment, inventories, and structures, which includes household purchases of new housing. Therefore, options A and B that include financial assets such as stocks and bonds are not considered investment for the purpose of GDP calculation. Option D excludes household purchases of new housing, which is considered a part of investment for GDP calculation.

Question 19

Which of the following is included in the investment component of GDP?

Accepted Answer

The answer of Which of the following is included in...

Question 20

Household spending on education is counted in which component or subcomponent of GDP?

Accepted Answer

Household spending on education is counted as a consumption of services, as education is a service that is consumed by households.

Quiz 23: Measuring a Nations Income

Which of the following is not an example of a durable good?

Which of the following is included in the investment component of GDP?

John buys a used car for $5,400 and spends $600 on new parts,made in the U.S. ,to fix the car.The end result of these two transactions is

Consider two items that might be included in GDP: (1) the estimated rental value of owner-occupied housing and (2) purchases of newly-constructed homes.How are these two items accounted for when GDP is calculated?

When economists refer to intangible items,they are referring to such things as

If you buy a burger and fries at your favorite fast food restaurant,

What word do economists use to refer to the purchase of goods that will be used in the future to produce more goods and services?

Which of the following is not an example of a nondurable good?

Which of the following is included in the investment component of GDP?

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

Which of the following is an example of a durable good?

Which of the following is included in the investment component of GDP?

Which of the following items is the one type of household expenditure that is categorized as investment rather than consumption?

Which of the following examples of household spending is categorized as investment rather than consumption?

Household spending on education is included in

A U.S.publisher purchases new computers that were manufactured in the U.S.This purchase by itself makes

The Carters' oldest son attends Big State University.He and his parents pay all his fees and tuition.These payments count in GDP as

For the purpose of calculating GDP,investment is spending on

Which of the following is included in the investment component of GDP?

Household spending on education is counted in which component or subcomponent of GDP?