Question

1. Bobby constructed a lake house for his family in upstate New York in 2012. Total spending to construct the house was $125,000. He sold the house in 2018 to Carlos for $ 215,000. Based on this scenario which of the following statement is correct?

	a.	In 2012 the value of the GDP will increase by $125,000.
	b.	In 2014 the value of GDP will increase by $340,000.
	c.	In 2018 the value of the GDP will increase by $215,000.
	d.	In 2018 the value of GDP will increase by $90,000.

2. The U.S Army hires South Korean citizens for their U.S base in South Korea and pays them $50,000. As a result

	a.	the U.S GDP will decrease by $50,000 because of a decrease in net exports and no affect in government purchases.
	b.	none of the variable will get affected.
	c.	the U.S GDP will increase by $50,000 due to an increase in government expenditure but there is no affect on their net exports.
	d.	the U.S GDP will remain unaffected as the government purchases increases and U.S net exports decreases by the same amount.

3. Flour will be considered as intermediate goods

	a.	no matter if it is purchased by a bakery company or if is purchased by a final consumer for their own consumption.
	b.	if it is purchased by a bakery company but not when purchased by a final consumer for their own consumption.
	c.	if someone purchased for their consumption but not when used for other purpose.
	d.	in no circumstances.

4. Gross Domestic Product can be calculated by

	a.	adding up all the quantities of the goods and services produced during the year.
	b.	adding up all the wages and salaries of the workers earned during the year.
	c.	adding up the profits from the goods and services produced during the year.
	d.	adding up the market values of all the final goods and services produced during the year.

Answer 1