ECONOMICS
BUSINESS CYCLES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A shoemaker increases its bulk purchases of leather to keep up with demand. Is this included in GDP?
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Yes-Investment
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Yes-Government Spending
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No-Intermediate Goods
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No-used item
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Explanation:
Detailed explanation-1: -Expert Answer Goods and services produced at home are not included in the GDP.
Detailed explanation-2: -If intermediate goods and services were included in GDP: the GDP would be overstated. the GDP would then have to be deflated for changes in the price level.
Detailed explanation-3: -Which of the following best describes gross domestic product (GDP)? The value of the output of all final goods and services produced within a country.
Detailed explanation-4: -Consumption expenditure by households is the largest component of GDP, accounting for more than two-thirds of the GDP in any year. This tells us that consumers’ spending decisions are a major driver of the economy.
There is 1 question to complete.