Question

a family hires a lawn mowing service rather than mowing the lawn themselves. the quality of...

a family hires a lawn mowing service rather than mowing the lawn themselves. the quality of the mowing is the same with the service as the family. as a result of this transaction_____.

a. measured GDP rises but the true output of the economy does not change

b. measured GDP rises but the true output of the economy decreases

c. measured GDP stays the same and the true output of the economy does not change

d. measured GDP falls but the true output of the economy does not change

e. none of the other choices is accurate
Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Answer

Option a) is correct. Measured GDP rises but the true output of the economy does not change

Reason:

GDP measures the market value of the goods and services a nation produces. Unpaid work that people do for themselves and their families isn't traded in the marketplace, so there are no transactions to track.

Thus, in our case the work done by the family themselves earlier was not measured as part of the GDP. Once the family hires a lawn mowing service, it gets counted in the GDP. However, the output remains the same as the same amount is being produced in the economy as earlier.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1. Recall the classical economists and one of their favorite theories: the quantity theory of money...
1. Recall the classical economists and one of their favorite theories: the quantity theory of money and monetary neutrality. The theory is expressed as an equation as follows: M x V = P x Y. What does V stand for? a. the value of the domestic currency b. the velocity of money c. the virtual reality of the universe d. the velocity of investment spending in the economy 2. Following up on question 1 above, what does Y represent? a....
1. Which of the following is FALSE about GDP? Group of answer choices GDP is considered...
1. Which of the following is FALSE about GDP? Group of answer choices GDP is considered one of the most important stats of an economy GDP can be used to at least informally determine whether a country is in recession When a country’s economic stats are presented, the first stat is often GDP GDP was invented by Franklin D. Roosevelt just after World War 2 ended GDP is not exactly the same as GNP 2. Again, consider the market for...
1. Holding everything else constant, the multiplier effect of a $100 tax cut : a)is the...
1. Holding everything else constant, the multiplier effect of a $100 tax cut : a)is the same as the multiplier effect of a $100 increase in G. b)is smaller than the multiplier effect of a $100 increase in G. c)is larger than the multiplier effect of a $100 increase in G. d)may be smaller than, larger than, or equal to the multiplier effect of a $100 increase in G. 2. When the government borrows funds in financial markets to pay...
The aggregate demand curve shows the relationship between the aggregate price level and: A) aggregate productivity....
The aggregate demand curve shows the relationship between the aggregate price level and: A) aggregate productivity. B) the aggregate unemployment rate. C) the aggregate quantity of output demanded by households, businesses, the government, and the rest of the world. D) the aggregate quantity of output demanded by businesses only. 2.When the aggregate price level increases, the purchasing power of many assets falls, causing a decrease in consumer spending. This is known as the _____ effect and is a reason why...
An income consumption curve shows what happens to the consumer's consumption of good X as nominal...
An income consumption curve shows what happens to the consumer's consumption of good X as nominal income increases and Group of answer choices the price of X falls. the prices of X and Y stay constant. the price of Y falls. real income stays constant. Flag this Question Question 5 5 pts If you were selling a product in a setting where incomes were rapidly rising, which of the 4 Engel curve slopes listed below would you prefer for your...
Consumers change their purchases and move ALONG the same consumption function when: Their income changes Their...
Consumers change their purchases and move ALONG the same consumption function when: Their income changes Their tastes change The price level changes All of the above.       12) If MPC is .75 then if consumer income rises by $10,000 we would predict that consumption will: A. rise by $7500 while savings fall by $2500. B. fall by $2500 while savings rise by $7500. C. rise by $7500 while savings rise by $2500. D. fall by $2500 while savings fall by...
1. Which is statement is true? I. A single-price monopolist charges a price equal to the...
1. Which is statement is true? I. A single-price monopolist charges a price equal to the marginal cost of the last unit sold. II. A monopolist with positive marginal costs and facing a linear demand curve always sets a quantity (or price) such that it sells on the elastic section of the demand curve. III. A monopolist regulated by marginal-cost pricing regulation sells at a price that covers its variable and fixed costs of production, but it still causes a...
1.) True or False? For all societies, resources are scarce, and technology is limited, while people’s...
1.) True or False? For all societies, resources are scarce, and technology is limited, while people’s wants and needs for goods and services seem to be unlimited. (2 points) 2.) (1 point) Adam Smith’s “invisible hand” refers to a.) the subtle and often hidden methods that businesses use to profit at consumers’ expense. b.) the ability of free markets to reach desirable outcomes, despite the self-interest of market participants. c.) the ability of government regulations to benefit consumers, even if...
QUESTION 1 ? What is the relationship between family dysfunction and schizophrenia? a. ?Research has substantiated...
QUESTION 1 ? What is the relationship between family dysfunction and schizophrenia? a. ?Research has substantiated a link between family dysfunction and schizophrenia but can't say which causes the other. b. ?Family dysfunction is a major causative factor for schizophrenia. c. ?Research has failed to substantiate a direct causal link between family dysfunction and schizophrenia. d. ?Family dysfunction plays a minor role in developing schizophrenia. 1.00000 points    QUESTION 2 ? Chuck has no life plan; he simply lives from...
Question 1 2.5 pts 1. The perfectly competitive firm's demand curve is horizontal at the market...
Question 1 2.5 pts 1. The perfectly competitive firm's demand curve is horizontal at the market price. True False Flag this Question Question 2 2.5 pts 2. In perfect competition, the market price is established at the intersection of the market demand and market supply curves in the industry and the individual firms are "price takers" of that market price. True False Flag this Question Question 3 2.5 pts 3. The perfectly competitive firm will continue to produce in the...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT