ECONOMICS
BUSINESS CYCLES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Households spend more on domestic air travel
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An increase in sale of illegal goods in the economy
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An increase in volunteer work
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An increase in the sale of used cars
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More people choose to stay at home to raise their children rather than using paid childcare
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Detailed explanation-1: -So what’s gonna cause the nation’s GDP um to go up would be if households spend more on domestic air travel, this is going to increase a nation’s GDP or gross domestic product.
Detailed explanation-2: -Broadly speaking, there are two main sources of economic growth: growth in the size of the workforce and growth in the productivity (output per hour worked) of that workforce. Either can increase the overall size of the economy but only strong productivity growth can increase per capita GDP and income.
Detailed explanation-3: -GDP measures the monetary value of final goods and services-that is, those that are bought by the final user-produced in a country in a given period of time (say a quarter or a year). It counts all of the output generated within the borders of a country.
Detailed explanation-4: -When using the expenditures approach to calculating GDP the components are consumption, investment, government spending, exports, and imports.
Detailed explanation-5: -The circular flow of income illustrates the links between income and spending in an economy. In its simplest form, revenue earned by firms by selling their output ultimately flows to households, which spend this income on the output produced by firms.