In Early 2010 Molly Paid $200,000 for a House Built

question 111

Multiple Choice

In early 2010 Molly paid $200,000 for a house built in 2000.She spent $30,000 on new materials to remodel the house.Although Molly lived in the house after she remodeled it,its rental value rose.Which of the following contributed to real GDP in 2010?

• A)the price of the house,the cost of remodeling materials,the increase in rental value
• B)the price of the house and the cost of remodeling materials,but not the increase in rental value
• C)the costs of the remodeling materials and the increase in rent,but not the price of the house
• D)None of the above are correct.

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Definitions:

Fundamental Attribution Error

The tendency to underestimate situational influences and overestimate personal traits as causes of others' behaviors.

Personal Factors

Individual attributes such as personality, beliefs, and experiences that influence one's behavior and perceptions.

Peter Principle

A theory suggesting that people are promoted to their level of incompetence in a hierarchical organization.

Primacy Effect

The tendency to remember and give greater importance to information that is encountered first in a sequence.