Answer to Question #67488 in Macroeconomics for Belinda

Question

The U.S. government treats the goods produced by a firm in a year that are not sold in that year as increases in inventories and includes them in that year's GDP at market prices. In other words, the government assumes that the firm itself buys those goods for future resale. With this convention in mind, place a 1 in a box if you think the statement is 100% true, place a 0 otherwise.

1.Any good produced in a year will be included in that year's GDP. ( )

2.Any good produced in a year will be included in that year's GDP, except those produced by households for household consumption. ( )

3.Any good produced and sold in a year will be included in that year's GDP. ( )

4.Any good produced and sold in a year will be included in that year's GDP, except those produced by firms that are not sold. ( )

5.Any good sold in a year will be included in that year's GDP. ( )

6.Any service sold in a year will be included in that year's GDP. ( )

Answer 1

1.Any good produced in a year will be included in that year's GDP. (0)

2.Any good produced in a year will be included in that year's GDP, except those produced by households for household consumption. (1)

3.Any good produced and sold in a year will be included in that year's GDP. (0)

4.Any good produced and sold in a year will be included in that year's GDP, except those produced by firms that are not sold. (1)

5.Any good sold in a year will be included in that year's GDP. (0)

6.Any service sold in a year will be included in that year's GDP. (1)