Question

____ 10.   What does inflation cause?

a.	incomes to fall
b.	productivity to increase
c.	the government to lower taxes
d.	the value of money to fall

____ 11.   Which of the following nonmarket goods or services is included as an estimate in Canadian GDP?

a.	the value of unpaid housework
b.	the value of vegetables that people grow in their gardens
c.	the estimated rental value of owner-occupied homes
d.	the estimated value of illegal drugs

____ 12.   How is gasoline treated in GDP terms?

a.	It is counted as an intermediate good.
b.	It is counted as a final good if a company uses it to provide transportation services.
c.	It is counted as a final good if a consumer uses it to mow her yard.
d.	It is counted as an intermediate good if a consumer uses it to mow a friend’s yard without pay.

Answer 1

1- when production cost increase then inflation occur.

But if government lower the tax then people have more money for spending so demnad is increases and demand increases then price also increases.

So option C is the correct statement

2-the estimated rental value of owner occupied homes is the correct statement because it is the non market goods.

3-gasoline treated in gdp terms as a final good if a consumer uses it to mow her yard

So option C is the correct statement.