Use the Information Below to Answer the Following Questions

question 115

Multiple Choice

Use the information below to answer the following questions.
Fact 4.1.2
Classify each of the following items as a final good or an intermediate good, and identify which is a component of consumptio expenditure, investment, or government expenditure on goods and services:
Item 1.A DVD bought by a household Item 2.A new airplane bought by WestJet Item 3.Aluminum sheets bought by Boeing
Item 4.A new limousine for the prime minister
-Refer to Fact 4.1.2.Item 3 is _______ and item 4 is _______.

• A)a final good that is investment; a final good that is government expenditure
• B)an intermediate good; a final good that is government expenditure
• C)an intermediate good; a final good that is investment
• D)a final good that is investment; a final good that is investment
• E)a final good that is investment; an intermediate good

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Definitions:

Uncommon Information

Information that is not readily available or known to the public, often providing a competitive edge in decision making or investments.

Factor Endowments

The amount of land, labor, capital, and entrepreneurship that a country possesses and can utilize for manufacturing goods and services.

Heckscher-Ohlin

A trade theory that suggests countries will export goods that utilize their abundant and cheap factors of production and import goods that utilize the countries' scarce factors.

Ricardian Trade Theory

An economic theory that suggests international trade is driven by comparative advantage, leading countries to specialize in the production of goods they can produce most efficiently.