A Texas Household Receives a Social Security Check for $1500

question 131

Multiple Choice

A Texas household receives a Social Security check for $1500, which it uses to purchase a $40 pair of shoes made in Thailand by a Thai firm, a $1240 television made by a Korean firm in Korea, and $220 on groceries from a local store. As a result, U.S. GDP

• A)increases by $40.
• B)increases by $220.
• C)increases by $280.
• D)increases by $1500.

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Definitions:

Third-Party Beneficiary

An individual or entity that benefits from the terms of a contract, despite not being one of the principal parties involved in the agreement.

Incidental Beneficiary

A third party who unintentionally benefits from a contract made between two other parties, without having any enforceable rights under that contract.

Novation

A legal process where an old debt, obligation, or contract is replaced by a new one, effectively extinguishing the original agreement and substituting it with a new party or terms.

Obligor

An Obligor is the party in a contractual agreement who is bound to provide a specified performance to another party, the obligee.