Which of the Following Statements Is Correct

question 120

Multiple Choice

Which of the following statements is correct?

• A)The value of all intermediate goods and final goods is included in GDP.
• B)The value of intermediate goods is included in GDP only if those goods were produced in the previous year.
• C)The value of intermediate goods is included in GDP only if those goods are added to firms' inventories to be used or sold at a later date.
• D)The value of intermediate goods is never included in GDP.

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Definitions:

Consumption Externalities

The impact of one's consumption activities on the welfare of others that is not reflected in market prices, either positive or negative.

Competitive Equilibrium

A market state where supply equals demand, ensuring that every buyer and seller is satisfied at the current price.

Contract Curve

In economics, it's the locus of points representing the final allocation of goods or resources that cannot be improved upon from the perspective of any individual without worsening the condition of another, particularly referenced within the Edgeworth box for pure exchange economies.

Competitive Equilibrium

A market state where supply meets demand, leading to an optimized distribution of goods and services among competing actors.