Exhibit 18-1 -In a Simple Economy, Wanda's Weavers Grows Cotton and Weaves

question 149

Multiple Choice

Exhibit 18-1

-In a simple economy, Wanda's Weavers grows cotton and weaves it into cloth. In the current year, Wanda's Weavers produces cloth valued at $1,000, half of which it sells directly to consumers for their own personal use and half of which it sells to Joe's T-shirts. Joe's T-shirts produces T-shirts valued at $1,500 for the current year. What is the value of GDP in this simple economy?

• A)$2,500
• B)$1,500
• C)$500
• D)$1,000
• E)$2,000

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Definitions:

Internal Control

Processes designed to provide reasonable assurance regarding the effectiveness and efficiency of operations, reliability of financial reporting, and compliance with applicable laws.

Safeguard

Measures or controls put in place to protect assets, including physical security and internal controls.

Signature Card

A document signed by an account holder at a financial institution that provides a specimen signature for the purpose of verifying future transactions.

ABA Code

A nine-digit identification number assigned to banks in the United States by the American Bankers Association, used for routing checks and electronic payments.