According to the BEA, in the Second Quarter of 2012

question 299

Multiple Choice

According to the BEA, in the second quarter of 2012 purchases of new residential structures rose by 8.9 percent. Using the expenditure approach, this change increases

• A) gross private domestic investment.
• B) government expenditure on goods and services.
• C) net exports of goods and services.
• D) personal consumption expenditures.

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Definitions:

Inferior Good

A type of good whose demand decreases as the income of consumers increases, contrasting with normal goods.

Supply

The total amount of a good or service that is available for purchase at any given price.

Perfectly Inelastic

Describes a situation where the quantity demanded or supplied does not change in response to a price change.

Recession

A period of declining real GDP, accompanied by lower real income and higher unemployment.