ECONOMICS
BUSINESS CYCLES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Yes
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No
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Either A or B
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None of the above
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Detailed explanation-1: -Purchase of tractor by a farmer. Yes, it will be included in the national income as it is a part of the capital formation or investment by the farmer.
Detailed explanation-2: -A farmer’s purchase of a new tractor. It will be included in the GDP because it is a purchase of the final good for investment.
Detailed explanation-3: -The four components of gross domestic product are personal consumption, business investment, government spending, and net exports.
Detailed explanation-4: -Not all productive activity is included in GDP. For example, unpaid work (such as that performed in the home or by volunteers) and black-market activities are not included because they are difficult to measure and value accurately.
Detailed explanation-5: -The official measure of GDP does not include measurements of leisure time available, nonmarket production, production in the underground economy, the distribution of income, or production externalities (e.g., pollution).