Which of the Following Transactions Would Increase GDP

question 59

Multiple Choice

Which of the following transactions would increase GDP?

• A) a new tricycle purchased at a department store sale by the parents of a three-year-old child
• B) the retirement check your uncle received for spending 25 years in the Marine Corps
• C) the five shares of Microsoft stock your grandparents gave you for making an A in economics
• D) the $200 you lost when your wallet was stolen

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Definitions:

Unavoidable Costs

Costs that cannot be eliminated, reduced, or postponed, and must be incurred regardless of specific business decisions or changes in operations.

Present Value Method

A technique used to determine the present value of future cash flows or income streams to evaluate investment projects or financial products.

Net Market Value

The amount that could be obtained from selling an asset in the market after deducting any selling costs or liabilities.

Uncertainty

The state of having limited knowledge where it is impossible to exactly describe the existing state, a future outcome, or more than one possible outcome.