Which of the Following Transactions Adds to U

question 7

Multiple Choice

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

• A)In 2015,Frank's Feta manufactures 2000 pounds of cheese that will eventually be sold to grocery stores.The 2000 pounds of cheese remains in Frank's inventory at the end of 2015.
• B)An Irish marketing consultant works in Richmond during the summer of 2015 and earns $45,000 during that time.
• C)When Len and Mika were both single,they lived in separate apartments and each paid $700 in rent.Len and Mika got married in 2015 and they bought a previously unoccupied house that,according to reliable estimates,could be rented for $1,500 per month.
• D)All of the above transactions add to U.S.GDP for 2015.

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Definitions:

Milton Friedman

An influential American economist known for his strong advocacy of free-market capitalism and for his role in the Chicago School of Economics.

John Maynard Keynes

A British economist whose theories on the importance of government intervention in economies during downturns led to the development of Keynesian economics.

Marginal Propensity

The ratio of the change in an economic agent's consumption as a result of a change in income, influencing saving and spending habits.

Save

To allocate income or resources for future use instead of immediate consumption, often by placing it in some form of a bank account or investment.