How does the contribution to national output of a wheat farmer get counted in the gross domestic product if the Bureau of Economic Analysis measures only the value of final goods such as loaves of bread?
A) Agricultural production is not part of GDP.
B) It is counted separately by the Department of Internal Revenue.
C) It is included in the cost of materials purchased by those who sell loaves of bread.
D) It is not counted, which results in an underestimation of GDP.
E) Wheat is also a final good because it is more ultimate than bread.
C
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Suppose that the MPC out of disposable income was 0.8 and the tax function for a given economy was T = – 30 + 0.25Y
An increase in the intercept of the tax function of 10 units (from – 30 to – 20) would cause equilibrium income in the simple Keynesian model to fall by a. -20 units. b. 10 units. c. 20 units. d. 40 units.
A. panel (b) only. In panel (b), there will be
A. a shortage of wheat. B. a surplus of wheat. C. equilibrium in the market. D. lines of people waiting to buy wheat.
Suppose that in a certain nation the flat income tax rate of 40 percent is reduced to 35 percent and as a result the tax base falls from $400 billion to $375 billion. As a result, tax revenues __________, indicating the nation is on the __________ portion of its Laffer curve
A) rise; upward-sloping B) rise; downward-sloping C) fall; upward-sloping D) fall; downward-sloping
The World Bank defines extreme poverty as income of less than $1.90 per day per person.
Answer the following statement true (T) or false (F)