Question

Question 13 1 pts Firms react to unplanned increases in inventories by increasing planned investment increasing prices to customers increasing the orders they send to suppliers reducing the orders they send to suppliers. Question 14 1 pts The largest expenditure component of US GDP is O Government spending O Business fixed capital investment Net exports Household consumption Question 15 1 pts The Pearsons and the Wesleys enjoy having green grass lawns in front of their houses. The Pearsons pay a professional lawn mower to mow their lawn, while the Wesley mow their own lawn. Which of the following is a correct statement about the effect on US GDP? ONeither the Pearsons payments nor the estimated value of the Wesleys' mowing services is a part of GDP Only the Pearsons' payments are counted towards GDP. The Pearsons' payments are counted towards GDP, while the estimated value of the Wesleys' mowing services becomes a part of GDP only if the Wesleys provide their estimate to the local statistical bureau Both the Pearsons payments and the estimated value of the Wesleys' mowing services are a part of GDP.

Answer 1

13) Reducing the orders they send to the suppliers

Firms react to an unplanned increase in inventory investment by reducing output. Thus they reduce the orders they send to the suppliers.

14) Household consumption

The largest expenditure component of US GDP is household consumption.