Question

1. Tina walks into Ted's sporting goods store and buys a punching bag for $100. That $100 payment counts as for Tina and for Ted. L07.1 a. Income; expenditure. b. Value added; multiple counting. C. Expenditure; income. i. Rents, profits. 3. Which of the following transactions would count in GOP? LO7.1 Select one or more answers from the choices shown. 2. Kerry buys a new sweater to wear this winter. b. Patricia receives a Social Security check. C. Roberto gives his daughter $50 for her birthday. d. Latika sells $1,000 of General Electric stock. e. Karen buys a new car. f. Amy buys a used car. https://online.macomb.edu/courses/32959/files/8989959?module_item_

Answer 1

Ans. 1:-

Tina walks into Ted’s sporting goods store and buys a punching bag for $100. That $100 payment counts as expenditure for Tina and income for Ted.

(Tina is a buyer so $100 is expenditure for her while Ted is seller so $100 is income for him)

Ans. 2:-

GDP stands for gross domestic product. It is the total value of all final goods produced and service provided in an economy during a period of time. So we can conclude that option a, d and e contributes to GDP as explained below:-

1. To be counted in GDP as this is a final goods.
2. Money is changing hand on receipt of Social security check and no new goods or services are coming into existence so this should not be counted in GDP.
3. Money is changing hand as gift on birthday and no new goods or services are coming into existence so this should not be counted in GDP.
4. To be counted in GDP as this stock is a final product.
5. To be counted in GDP as this is a final product.
6. Buying an old car will not be counted in GDP since it has already been counted in GDP when it was sold in new condition.