If a homeowner sells a kitchen table and chairs that she no longer wants to use and does not report the income earned from the sale to the Internal Revenue Service, the value of GDP is
A) understated because this transaction took place in the underground economy.
B) overstated because the sale of the furniture is counted twice in GDP calculations.
C) unaffected by this transaction because the table and chairs were already counted in GDP as final goods when the homeowner bought them new.
D) understated because this purchase was a nonmarket transaction.
Correct Answer:
Verified
Q2: Which of the following is the most
Q73: Exhibit 5-4 Gross domestic product data
Q74: GDP does not count:
A) the estimated value
Q75: National income is calculated as GDP:
A) plus
Q76: If GDP is $9,560 billion and depreciation
Q77: Exhibit 5-5 Gross domestic product data
Q80: GDP overstates the productive capacity of a
Q81: Exhibit 5-7 GDP data (billions of dollars)
Q82: Real GDP means GDP:
A) valued at prices
Q83: Which national income account should be examined
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