If the purchase of used goods was to be incorporated into measuring GDP using the expenditure approach, then
A) consumption spending would need to be adjusted for depreciation.
B) it will be very difficult to assign a fair market value to a used good.
C) we will have to account for the natural depreciation that a used good experiences.
D) we also will have to account for spending on financial assets.
E) we will be counting the value of the used goods both at the time of their production and at the time of their re-sale.
E
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For public goods, in general, the optimal output level is found where the marginal benefits of additional production equal marginal cost
a. True b. False
When positive externalities exist, markets tend to overproduce
a. True b. False Indicate whether the statement is true or false
According to the Herfindahl-Hirschman Index, which is the more concentrated industry?
A. Industry X with an index of 2,400.
B. Industry Y with an index of 2,738.
C. Both industries have the same indices.
D. There is no way to determine the Herfindahl Indices of these industries with this data.
Money illusion is the
A. Movement of taxpayers into higher tax brackets as nominal income increases. B. Focus on real dollars rather than nominal dollars to determine purchasing power over time. C. Use of nominal dollars rather than real dollars to gauge changes in one's income or wealth. D. Uncertainty that occurs because of inflation.