If a Farmer Buys a New Tractor from John Deere

question 148

Multiple Choice

If a farmer buys a new tractor from John Deere for use on her cotton farm, it is included in GDP as:

• A) a nondurable consumption good.
• B) part of private investment.
• C) a durable consumption good.
• D) a service.

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Definitions:

Flotation Costs

The costs incurred by a company when issuing new securities, including underwriting fees, legal fees, and registration fees.

Selling Stock

The act of disposing of shares in a company, either privately or publicly, typically to raise capital or realize gains from investment appreciation.

Abnormal Returns

Returns on a security or portfolio that exceed the expected rate of return, not predicted by market models or theories.

Direct Expenses

Costs directly attributable to the production of a specific product or service, such as materials and labor.