The reason only newly produced goods and services are counted in GDP is that ________
A) it is very difficult to impute a value to used goods
B) most expenditures on used goods and services take place outside the market
C) it does not help economists make better economic predictions because second-hand goods rarely have any residual value
D) it allows economists to avoid double counting the production of goods and services
E) none of the above
D
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The freedom of entry and exit in monopolistic competition means that firms
A) enter the market when economic losses are being suffered. B) exit the market when economic profits are being earned. C) enter the market when normal profits are being earned. D) can enter a market to compete for economic profits and leave when economic losses are being incurred. E) find it easy to permanently earn an economic profit.
The biggest single factor affecting household income is the householder's age
Indicate whether the statement is true or false
Investment spending will decrease when
A) firms become more optimistic about earning future profits. B) the corporate income tax decreases. C) business cash flow decreases. D) the interest rate falls.
The long-run aggregate supply curve will shift to the right if the:
A. potential output of the economy expands. B. economy loses productive capacity. C. economy experiences a supply shock. D. profit levels of firms increase.