The Immediate Effect of a Purchase of a Government Bond

question 21

Multiple Choice

The immediate effect of a purchase of a government bond on the gross domestic product (GDP) is_____.

• A)a decrease in consumption
• B)an increase in government spending
• C)an increase in investment
• D)a decrease in investment
• E)nonexistent,since no real goods and services have been produced

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Definitions:

Consideration

The value (such as money, services, or goods) promised in a contract which motivates a party to enter into the agreement.

Article 9

A provision of the Uniform Commercial Code that governs secured transactions involving personal property.

Real Property

Land and anything permanently attached to it, such as buildings and trees, as opposed to personal property.

UCC

The Uniform Commercial Code consists of regulations governing sales and commercial activities across the United States.