Question Details

The calculation of the final goods and services sold in an economy would NOT include



1) Intermediate goods are excluded from GDP because
A) their inclusion would involve double counting.
B) they represent goods that have never been purchased so they cannot be counted.
C) their inclusion would understate GDP
D) the premise of the question is incorrect because intermediate goods are directly included in
calculating GDP.

2) A ton of coal purchased by your local utility to burn to make electricity would be best described
as
A) an intermediate good.
B) a financial asset.
C) a used good.
D) a final product.

3) Which of the following expenditures is for an intermediate good?
A) The government buys new tires for its military vehicles.
B) A U.S. tire firm sells new tires to Canada.
C) General Motors buys new tires to put on the cars itʹs building.
D) You buy new tires for your used car.

4) GDP does not directly include intermediate goods because
A) intermediate goods are not valuable.
B) intermediate goods are not useful to consumers.
C) that would count the intermediate goods twice.
D) that would understate the true size of GDP.

5) The calculation of the final goods and services sold in an economy would NOT include
A) the purchase of a lawnmower by a household.
B) General Motorsʹ purchases of tires for new automobiles.
C) Ford Motor Companyʹs purchase of a new industrial robot to be used to produce cars.
D) the purchase of a service by a household.




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