Joe Has a Full-Time Construction Job and Also Does Odd

question 73

Multiple Choice

Joe has a full-time construction job and also does odd jobs for people on the weekends.You have purchased the materials needed to construct a fence at your house and you pay Joe $500 to build the fence.Does the payment to Joe count toward the value of GDP?

• A) Yes, the fence increases the value of your house.
• B) Yes, all income earned counts in GDP.
• C) No, his is a non-market activity.
• D) No, if this income is not likely to be reported to the government.
• E) No, this is a leisure activity.

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Definitions:

Exercise Price

The rate at which an option's owner is permitted to purchase or sell the underlying asset.

Option Contract

A contract which gives the buyer the right, but not the obligation, to buy or sell an underlying asset or instrument at a specified strike price prior to or on a specified date.

Call Option

A financial contract that gives the buyer the right, but not the obligation, to buy an asset at a specified price within a certain period.

Strike Price

The set price at which an option contract can be bought (call) or sold (put) when it is exercised.