Question : 31) Economists define investment to include purchases of A) capital goods : 1228234

31) Economists define investment to include purchases of

A) capital goods and inventories.

B) capital goods, household durable goods, and inventories.

C) capital goods, such as tools, instruments, and buildings.

D) capital goods, equity stocks, and bonds.

E) capital goods, equity stocks, and inventories.

32) Investment includes

A) GM’s purchase of robotic machinery.

B) student purchases of laptops.

C) Walmart’s purchase of health insurance for its workers.

D) the New York City Library’s purchase of new books.

E) wages paid to military personnel.

33) In measuring GDP, which of the following is included?

A) the value of preparing meals at home

B) the value of stocks and bonds bought and sold

C) the value of used goods when they are sold

D) the value of increases in business inventories

E) the value of durable consumption goods but not the value of nondurable consumption goods.

34) If a firm does not sell all of the goods that it produces in a given time period, then the goods

A) do not count in GDP ever.

B) do not count in GDP for that time period but always count next period.

C) count positively in GDP as inventory investment.

D) count negatively in GDP as inventory investment.

E) count in GDP the period they are sold to the final user.

35) This year a firm produces $100 million worth of cars this year and sells $102 million worth of cars. Which of the following is true?

A) GDP for this year will increase by $100 million.

B) GDP for this year will increase by $102 million.

C) Inventory investment will increase by $2 million.

D) GDP for this year will increase by $202 million.

E) The premise of the question is wrong because it is impossible for a firm to sell more than it produces in a given time period.

36) Bob’s Funky T-shirts began the year with 1,000 shirts in inventory, produced 10,000 shirts during the year and ended the year with 1,100 shirts in inventory. The 100 shirts added to his inventory will be classified as

A) consumption expenditure.

B) investment.

C) net exports of goods and services.

D) exports of goods and services.

E) nondurable consumption goods.

37) When measuring GDP,

A) the government sector is not included because it is the public sector not the private sector.

B) the government sector is counted, and the value of the government sector in GDP is equal to its tax revenue.

C) only the federal government’s expenditure on goods and services are included.

D) the expenditure on goods and services by all levels of government are included.

E) the government sector is not counted because it does not produce goods and services.

38) Government expenditures on goods and services include

i)the New York City Library’s purchase of new books.

ii)Washington D.C.’s purchase of gas for its city buses.

iii)California’s payment of wages to prison guards.

A) i and ii

B) i and iii

C) ii and iii

D) i, ii and iii

E) i only

39) Net exports of goods and services is equal to the value of

A) exports plus the value of imports.

B) imports minus the value of exports.

C) domestic consumption minus the value of imports.

D) exports minus the value of imports.

E) domestic consumption minus the value of exports.

40) Net exports of goods and services are defined as the

A) value of the goods we sell to foreigners.

B) income we receive from selling goods to foreigners.

C) value of exports minus the value of imports.

D) value of exports minus the income we receive from foreigners.

E) value of exports plus the income we receive from foreigners.