Which of the following is included in GDP?
A) the buying and selling of securities
B) government transfer payments
C) private transfer payments
D) none of the above
22) Wheat used for producing bread is
A) a final good.
B) not going to generate any employment.
C) an intermediate good.
D) a durable good.
23) The term "value added" refers to the dollar value of
A) an industry's sales plus profits.
B) the intermediate goods purchased by an industry.
C) an industry's sales less the dollar value of the intermediate goods purchased by the industry.
D) the intermediate goods purchased by an industry plus the profits of the industry.
24) The owner of an oil well in Alberta sells 1,000 barrels of oil to a refinery in the U.S. for $12,000. This transaction
A) increases GDP by $12,000.
B) has no effect on GDP because the refinery is in the U.S.
C) decreases GDP because oil reserves have fallen by 1,000 barrels.
D) has no effect on GDP because this is the sale of an intermediate product.
25) A farmer buys seed for 15 cents that is used to grow wheat. The farmer sells the wheat to the miller for 30 cents, who makes flour. The flour is sold to the baker for 60 cents and the baker makes bread, which is sold to the grocer for 90 cents. The grocer sells the bread for $1.25. What is the value added for the miller?
A) 60 cents
B) 45 cents
C) 30 cents
D) 90 cents
26) Which of the following transactions would be included in GDP?
A) The purchase of 100 shares of Microsoft stock
B) The purchase of a government bond
C) The purchase of a litre of gasoline to run a lawn mower
D) The purchase of a stolen television set
27) GDP figures may understate the value of goods and services due to
A) the exclusion of the underground economy.
B) the inclusion of household production.
C) the inclusion of legal non-reported, non-taxed income.
D) the exclusion of the value of stocks.
28) The purchase of a share of stock is excluded in the calculation of GDP because it
A) is an intermediate good.
B) produces value added.
C) only represents the transfer of ownership rights.
D) is a final service and not a good.
29) A family sells the house they have lived in for two years to a friend. They received $150,000 and paid $120,000 two years ago. This transaction
A) Increases GDP by $150,000.
B) Increases GDP by $30,000.
C) Has no effect on GDP because the house was not made this year.
D) Has no effect on GDP because the house is an intermediate good.
30) When we use the term fixed investment, we include in investment
A) the purchase of stocks and bonds.
B) the purchase of consumer goods.
C) the purchase of private bonds, but not government bonds.
D) the purchase of equipment and other capital goods.
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