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Questions and Answers
What is used to compute the total value of different goods and services in the national income accounts?
What is used to compute the total value of different goods and services in the national income accounts?
- Wholesale prices
- Production costs
- Market prices (correct)
- Retail prices
Why is the sale of a rare Mickey Mantle card not included as part of GDP?
Why is the sale of a rare Mickey Mantle card not included as part of GDP?
- It represents the transfer of an asset, not an addition to the economy’s income. (correct)
- It is a used good.
- It is not valued at market price.
- It is not a currently produced good.
What happens to GDP if a bakery hires workers to produce more bread, pays their wages, but fails to sell the additional bread which later spoils?
What happens to GDP if a bakery hires workers to produce more bread, pays their wages, but fails to sell the additional bread which later spoils?
- GDP increases due to the wages paid.
- GDP decreases due to the spoilage of bread.
- GDP remains unchanged as the transaction does not alter GDP. (correct)
- GDP increases due to the additional bread produced.
Why is the sale of bread out of inventory similar to the sale of a used good in terms of affecting GDP?
Why is the sale of bread out of inventory similar to the sale of a used good in terms of affecting GDP?
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Why are wholesale prices not used to compute the total value of different goods and services in the national income accounts?
Why are wholesale prices not used to compute the total value of different goods and services in the national income accounts?
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