Which of the Actions Below Will Not Increase GDP

question 25

Multiple Choice

Which of the actions below will not increase GDP?

• A)Bears prowl suburban areas,overturning garbage cans so that the town must hire more sanitation workers to clean up.
• B)Vandals spray paint all over brick buildings,increasing business for paint removal services.
• C)An installer of automobile tires takes a knife to the tires of cars parked in his neighborhood.
• D)A homemaker spends $20 taking the family to lunch at Burger King instead of spending the $20 to buy food to prepare at home.
• E)A consumer has a tune-up done on his pick-up truck at the local garage.

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Definitions:

Recognised Assets

Assets that have been formally acknowledged and recorded on the balance sheet due to their probable future economic benefits.

Unrecognised Firm Commitments

Obligations or agreements that a company has committed to, but are not yet recorded on the balance sheet because they do not meet the recognition criteria.

Hedge Effectiveness

A measure of the degree to which a hedge transaction reduces the risk of the underlying exposure it was intended to hedge.

Hedge Exposure

A risk management strategy used to reduce or mitigate the risk of adverse price movements in an asset, typically through the use of derivative instruments.