An Example of a Good or Service That Would Count

question 16

Multiple Choice

An example of a good or service that would count in the U.S. GDP would be a bag of coffee made in:

• A) Vermont by Green Mountain Coffee Roasters.
• B) Colombia by Dunkin' Donuts.
• C) Canada by Starbucks.
• D) All of these would count in U.S. GDP.

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Definitions:

Loanable Funds

The funds available for borrowing in the financial markets, consisting of savings and sometimes bank loans that are available to be lent to businesses and individuals.

Interest Rate

The rate at which borrowers are charged for accessing assets, specified as a percentage of the original sum borrowed.

Desired Saving

The portion of income that households choose to save rather than spend on consumption.

Desired Investment

The level of investment that firms plan or wish to undertake based on their expectations of future economic conditions.