Answer to Question #134878 in Macroeconomics for December

Question

21. Which of the following items would NOT be included in the calculation of GDP?
[1] purchase of electricity by a household for home use
[2] merchandise exports by local firms
[3] purchase of a used car by Thomas for personal use
[4] purchase of new bicycles by a bicycle rental firm
22. Which one of the following is an example of an intermediate good?
[1] shoes worn by the manager of a shoe store
[2] a loaf of bread that is served to hotel guests
[3] a lawnmower used by Thomas to mow his family’s lawn
[4] apples used for cooking and to make juice for hotel guests

Answer 1

21. Which of the following items would NOT be included in the calculation of GDP?

[3] purchase of a used car by Thomas for personal use

One product will be counted for only once in the GDP calculation and that means when there is a resale of the product, it will not be accounted for the GDP calculations. Thus, the value of the car will be included in the year in which it was produced and that means the resale will not be accounted for the GDP.

22. Which one of the following is an example of an intermediate good?

[4] apples used for cooking and to make juice for hotel guests

Because you process apples and add value to them. (In this sense, you are a commercial company!).