Question

1. Which of the following components of GDP includes your tuition payments? A) investment B) consumption of nondurable goods C) consumption of services D) consumption of durable goods

2. T/F In the economy, income earned when producing new final goods and services must equal expenditure on the new final goods and services

3) T/F When you go to your local mall and buy new clothing that was produced in a foreign country, this has no impact on our GDP?

4) T/F Net export spending will have a negative value when the country exports more goods than it imports from other countries

5) Which items directly add to GDP? Microsoft sells 10 computers to UCF Y/N Ford buys tires from Good year to install on new cars Y/N Edna buys some antique furniture that she plans to sell at a later date in her store Y/N George buys a 4 year old car at CarMax Y/N

6) Which of the following is not included in the consumption components of GDP? A) household purchases of food sold in the US but produced abroad B) household purchases of newly constructed homes C) household purchases of medical care D) household purchases of appliances

Answer 1

(1) (C)

Tuition fees will be classified as consumption of services.

(2) T

GDP computed using income method and expenditure method are the same.

(3) T

Imported goods are excluded from GDP since these are not manufactured within the boundaries of the country.

(4) F

Net exports (NX) = Exports (X) - Imports (M)

If X > M, NX > 0.

NOTE: As per Chegg Answering Policy, 1st 4 questions have been answered.