This month Jones bought $10 of fresh hops for making home-brewed lager. In principle, what happens to GDP?
A) Nothing, because it involves the production of homemade beer.
B) Nothing, because the hops are an intermediate good.
C) GDP increases by $10.
D) GDP increases by $10 as long as Jones is satisfied with the final product.
C
You might also like to view...
When the government chooses to spend the tax dollars that it collects on homeland security, its choice
A) involves a tradeoff of other goods and services such as education for more homeland security. B) illustrates that scarcity does not always exist. C) involves no tradeoff because the defense is necessary. D) primarily affects who gets the goods and services produced.
The monetary rule is the view of the:
a. Keynesians that monetary policy is most important. b. Monetarists that monetary policy is most important. c. Classical economists that monetary policy is most important. d. Monetarists that the Fed should expand the money supply at a constant rate.