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Suppose a Friend Claims He Is Helping the Economy by Throwing

Question 16

Multiple Choice

Suppose a friend claims he is helping the economy by throwing trash on the street rather than in trash cans because the extra expenditures necessary to clean up the streets will increase GDP.Your friend is


A) Wrong.GDP will not be affected because nothing new is being produced.
B) Right.GDP will increase,ceteris paribus.
C) Wrong.GDP will not be affected because this is not a socially desirable use of resources and will therefore not be included in GDP.
D) Wrong.GDP will decline because the neighborhood will be less clean.

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