Consider Two Items That Might Be Included in GDP: (1)the

question 47

Multiple Choice

Consider two items that might be included in GDP: (1) the estimated rental value of owner-occupied housing and (2) purchases of newly-constructed homes.How are these two items accounted for when GDP is calculated?

• A)Both item (1)and item (2)are included in the consumption component of GDP.
• B)Item (1)is included in the consumption component of GDP,while item (2)is included in the investment component of GDP.
• C)Item (1)is included in the investment component of GDP,while item (2)is included in the consumption component of GDP.
• D)Only item (2)is included in GDP,and it is included in the investment component.

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Definitions:

Intercompany Bond Gains

Profits arising from bonds sold or traded between companies within the same corporate group.

Unamortized Bond Discount

The portion of the bond issuance price that is below the face value and has not yet been expensed in the financial statements.

Consolidated Income Statement

An income statement that combines the financial performance of a parent company and its subsidiaries, showing the total revenue, expenses, and net income of the entire group.

Intercompany Bonds

Bonds issued between entities within the same corporate group, often used for internal financing purposes.