Which of the Following Transactions Would Be Included in U

question 192

Multiple Choice

Which of the following transactions would be included in U.S.GDP but not in GNP?

• A)An American tourist spends money in Mexico City.
• B)The U.S.government hires an American economist to evaluate United States/Mexico trade policy.
• C)A car is produced in Detroit and exported to Mexico.
• D)A salary is paid to a Canadian engineer employed in the California computer industry.

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Definitions:

Price Elasticity

A measure indicating the extent to which the demand for a merchandise changes following a price adjustment.

Short Run

A period in economics during which at least one input is fixed and cannot be changed by the firm.

Long Run

A period in which all factors of production and costs are variable and companies can enter or exit an industry.

Demand

The quantity of a product or service that consumers are willing and able to purchase at various price levels at a given time.