Are sales and purchases of used goods counted as part of GDP? Why or why not?
What will be an ideal response?
Sales and purchases of used goods are not counted as part of GDP. GDP measures the production of final goods and services produced within a country in a given time period. So GDP for the United States for 2014 includes the goods and services produced within the United States during 2014. The point is that a used good has not been produced within the specified time period. In other words, a used automobile produced in 2012, then in 2014 traded in and resold within the United States was not produced in 2014. Because it was not produced in 2014, it is not a part of the GDP in 2014. (If the automobile was produced within the United States in 2012, the automobile was part of the U.S. GDP in 2012.)
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How are TIPS adjusted for inflation?
A) The interest rate is adjusted for inflation during each period. B) The principal is adjusted once the bond reaches maturity. C) The principal is adjusted for inflation each period. D) The interest rate is adjusted once the bond reaches maturity.
A period of stagflation can be considered as part of the normal aftermath of a
A. decrease in aggregate demand. B. period of high unemployment. C. period of low unemployment. D. period of inward shifting aggregate demand.