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.
A. Consumption will go up by $1,500, because a computer is a durable good.
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Why do both households and societies face many decisions?
a) because resources are scarce b) because populations may increase or decrease over time c) because wages for households and therefore society fluctuate with business cycles d) because people, by nature, tend to disagree
Which of the following statements is true regarding expansionary fiscal policy?
A) It leads to an increase in the supply of bonds by the Treasury. B) It leads to a fall in interest rates. C) It leads to an increase in net exports. D) It tends to reduce to size of government.