If a Local Shop Buys a Used Motorcycle for $1,000,refurbishes

question 156

Multiple Choice

If a local shop buys a used motorcycle for $1,000,refurbishes it,and resells it for $2,500,the

• A)shop contributes value added equal to $1,500,but nothing is added to GDP.
• B)shop contributes value added equal to $1,500,and consequently $1,500 is added to GDP.
• C)shop contributes nothing to production because only existing goods are involved.
• D)shop contributes value added equal to $2,500,but only $1,500 is added to GDP.

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Definitions:

Qualified Education Loan

A loan taken out solely to pay qualified higher education expenses for the borrower, the borrower's spouse, or the borrower's dependent.

Qualified Education Expenses

Expenses required for enrollment or attendance at an educational institution, including tuition, fees, and course-related costs.

Taxpayer's Spouse

The legally married partner of a taxpayer, who may be considered for joint tax filing status and benefits.

Alimony Recapture Rules

Tax regulations designed to prevent excessive deductions for alimony payments, potentially requiring a payer to include in income previously deducted payments under certain conditions.