Question 1

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

Accepted Answer

Nondurable goods are products that are consumed or used up in a short period of time, typically less than three years. A microwave is a durable good that has a lifespan of more than three years, so it is not an example of a nondurable good. Therefore, option C is the correct answer. Choices A, B, and D are all examples of nondurable goods as they are consumed or used up relatively quickly.

Question 2

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 3

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

Accepted Answer

Expenditures on new housing is categorized as investment rather than consumption because it involves the purchase of a long-lasting asset that is expected to provide a stream of income or use over time. Expenditures on durable goods such as automobiles and refrigerators can be considered investment as well, depending on the length of their useful lives and whether they are used for personal or business purposes. Expenditures on intangible items such as medical care are typically categorized as consumption because they are used up immediately rather than being expected to provide long-term benefits or income.

Question 4

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

Accepted Answer

Durable goods are goods that last for an extended period of time and can be used repeatedly. A refrigerator, automobile, and furnace are all examples of durable goods because they can be used for a long time. However, a business suit is not a durable good because it is typically worn for special occasions and does not last for an extended period of time.

Question 5

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 assets a company uses to produce goods and services, while consumption refers to the use of goods and services for personal satisfaction. Costs are the expenses incurred by a company in producing and selling goods and services. Therefore, the best choice is C, investment.

Question 6

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 7

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

Accepted Answer

The answer of If you buy a burger and fries...

Question 8

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...

Question 9

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

Accepted Answer

The investment component of GDP includes all three options: spending to build new houses (residential investment), spending to build new factories (nonresidential investment), and spending on business equipment such as welding equipment (business investment).

Question 10

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

Accepted Answer

All of the above are included in the consumption component of GDP. The consumption component of GDP consists of household purchases of goods and services, including durable goods such as appliances, nondurable goods such as food, and services such as medical care.

Question 11

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 purchase of the used car does not affect GDP as it was already counted when first sold. Only the $600 spent on new parts contributes to GDP.

Question 12

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 is considered consumption of services and is included in the calculation of GDP. It is not investment or government spending, and it is not the consumption of a durable good.

Question 13

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

Accepted Answer

A refrigerator is a long-lasting consumer good and is considered a durable good because it is expected to last for a long period of time.

Question 14

Household spending on education is included in

Accepted Answer

Household spending on education is typically classified as consumption because it is considered a current expenditure on a service for personal satisfaction rather than an investment in a productive asset. However, it could be argued that education is an investment in human capital and therefore belongs in the investment category, but this is not the standard practice in the calculation of GDP.

Question 15

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

Accepted Answer

Household spending on education is a type of consumption of services, which falls under the "C" component (personal consumption expenditures) of GDP.

Question 16

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

Item (1), the estimated rental value of owner-occupied housing, is not explicitly paid for in the market and therefore cannot be included in GDP as a market transaction. Instead, it is imputed as part of the consumption component of GDP. Item (2), purchases of newly-constructed homes, is a market transaction and is included in the investment component of GDP.

Question 17

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 expected to provide a future stream of income in the form of rent or a potential resale value. The other options listed are all categorized as consumption expenditures because they are used up or consumed over time and do not provide a future stream of income.

Question 18

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, but not spending on stocks and bonds. Stocks and bonds are considered financial investments and are not included in the calculation of GDP.

Question 19

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

Accepted Answer

All of the options listed (households' purchases of newly constructed homes, net additions to firms' inventories, and firms' purchases of capital equipment) are examples of investment spending, which is included in the investment component of GDP.

Question 20

For the purpose of calculating GDP, investment is spending on

Accepted Answer

Investment, in the context of GDP calculation, refers to spending on capital goods including capital equipment, inventories, and structures. It also includes household purchases of new housing, distinguishing it from financial investments like stocks and bonds.

Quiz 10: Measuring a Nations Income

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

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

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

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

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 included in the investment component of GDP?

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

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

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

Which of the following is included in the consumption 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

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

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

Household spending on education is included in

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

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?

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

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

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

For the purpose of calculating GDP, investment is spending on