ECONOMICS
BUSINESS CYCLES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Ms. Jones purchases a share of stock in a technology start-up company
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An auto retailer purchases imported cars
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The government hires workers to install streetlights
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A business sells used watches
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A mother prepares a home cooked meal for her family
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Detailed explanation-1: -When using the expenditures approach to calculating GDP the components are consumption, investment, government spending, exports, and imports.
Detailed explanation-2: -An increase in government spending and a rise in the firm’s inventories are most likely to increase a country’s GDP. A rise in government spending leads to increased money circulation in the economy, which induces business growth. This growth leads to expansion in the firm’s production.
Detailed explanation-3: -Detailed Solution. The correct answer is 2 only. The gross domestic product is the total monetary or market worth of all finished goods and services produced within the borders of a nation in a given time period.
Detailed explanation-4: -The major items included in the calculation of GDP include business investment, net exports, individual consumptions, and government expenditures. The GDP calculation does not transfer payments, purchases, and sales of used goods, intermediate goods, etc.