An Example of an Item That Would Be Excluded from a Measure

question 34

Multiple Choice

An example of an item that would be excluded from a measure of GDP from the expenditure side is

• A)a new truck purchased by a furniture- delivery company.
• B)government pension payments to a retired person.
• C)the purchase of windows by an automobile assembly plant.
• D)the purchase of a tattoo for Mary Smith's ankle.
• E)fertilizer purchased by Farmer Jones to increase crop yields.

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Definitions:

Threat of Entry

The risk existing businesses face when new competitors are able to enter the market or industry.

Existing Competitors

Companies that are currently operating in the same market and competing for the same customers.

Industry

A classification that refers to groups of companies that are related based on their primary business activities.

Bargaining Power

The relative ability of parties in a negotiation to exert influence over each other, often determining the terms and conditions of agreements.