Which of the Following Transactions Adds to U

question 47

Multiple Choice

Which of the following transactions adds to U.S.GDP for 2015?

• A)In 2015,Ann sells a car that she bought in 2011 to Bill for $7,000.
• B)An American management consultant works in Canada during the summer of 2015 and earns the equivalent of $40,000 during that time.
• C)When Ken and Kim were both single,they lived in separate apartments and each paid $800 in rent.Ken and Kim got married in 2015 and they bought a previously unoccupied house that,according to reliable estimates,could be rented for $1,700 per month.
• D)None of the above transactions adds to U.S.GDP for 2015.

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Definitions:

Income Tax Expense

The cost associated with income taxes owed to federal, state, or local governments, recognized in the accounting period in which the income was earned.

Times Interest Earned Ratio

A financial metric that measures a company's ability to meet its debt obligations by comparing its income before interest and taxes to its interest expenses.

Income Before Taxes

Income before taxes is a measure of a company's profitability before any tax expense has been deducted from revenues.

Interest Expense

The cost incurred by an entity for borrowed funds over a period of time.