Ace Has Always Been a Top Student, So It Was

question 99

Multiple Choice

Ace has always been a top student, so it was no surprise he won a $1,500 scholarship from the company where he worked summers to help with college expenses. Ace decides to spend his scholarship money on a new Apple MacBook. How will GDP be affected by Ace's recent purchases?

• A) Consumption will go up by $1,500, because a computer is a durable good.
• B) Investment will go up by $1,500, because a computer is a durable good.
• C) GDP will not be affected, since Ace acquired the computer with scholarship money.
• D) Consumption will go up by $1,500, because a computer is a nondurable good.

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Definitions:

Fluid

In a physical context, a substance that has no fixed shape and yields easily to external pressure; in a cognitive context, it refers to the capacity to think abstractly and reason adaptively.

Ectoderm

The outermost layer of cells or tissue of an embryo in early development, giving rise to the nervous system and the epidermis, among other structures.

Mesoderm

The middle layer of an embryo in early development, giving rise to the musculoskeletal, vascular, and urogenital systems.

Trophoblast

The outer layer of cells surrounding a blastocyst in early pregnancy, which provides nutrients to the embryo and develops into part of the placenta.