Question

onsider the following events and decide what their direct effect on GDP is. (1) A couple...

onsider the following events and decide what their direct effect on GDP is. (1) A couple buys two tickets for the show "O" in Las Vegas. (2) A family buys long-term bonds to save for the future. (3) Dave sells his old motorbike to his neighbor.

a.

Events (1) and (2) increase GDP, but (3) does not.

b.

Events (1) and (3) increase GDP, but (2) does not.

c.

Event (1) increases GDP, but (2) and (3) do not.

d.

Event (2) increases GDP, but (1) and (3) do not.

Homework Answers

Answer #1

GDP is the final production value of goods and services that is produced within the domestic boundary of a country in a financial year

it only includes final goods and services

it does not include secondhand items or intermediate goods

it does not include stock or bond

it does not include secondhand items as well

1.

in case one when couple buys to show tickets then it will come under the consumption so it will be counted under GDP

2 In second case long-term bonds, it will not include in GDP as explained well above

3

in third case second hand motor bike will also not be included because it is second hand item

SO THE ANSWER IS OPTION C

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