Which of the Following Transactions Adds to U

question 115

Multiple Choice

Which of the following transactions adds to U.S. GDP for 2010?

• A)In 2010, Ashley sells a car that she bought in 2006 to William for $5,000.
• B)An American management consultant works in Mexico during the summer of 2010 and earns the equivalent of $30,000 during that time.
• C)When John and Jennifer were both single, they lived in separate apartments and each paid $750 in rent. John and Jennifer got married in 2010 and they bought a previously unoccupied house that, according to reliable estimates, could be rented for $1,600 per month.
• D)None of the above transactions adds to U.S. GDP for 2010.

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Definitions:

Acquisition Business Combination

An acquisition business combination is a transaction or event where one entity gains control over another, often involving the purchase of the target company's stock or assets.

Fair Value

The estimated market value of an asset or liability, reflecting the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Common Stock

A form of corporate equity ownership, a type of security representing ownership in a corporation and gives rights to dividends and voting in company matters.

Acquisition

The process of obtaining control of another company or business entity through purchase or merger.