16) The final market value of a good is A) the sum of all value added at all sta
ID: 1127768 • Letter: 1
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16) The final market value of a good is A) the sum of all value added at all stages of production B) the value added during the last stage of production C) the sum of all final values at each stage of production D) less than the price it is sold at 17) Depreciation (capital consumption allowance) is subtracted from GDP to get NDP because A) represents the value of intermediate goods B) reflects double counting C) represents income that we earn but do not receive D) represents investment undertaken merely to replace worn out capital 18) Disposable income consists of A) Government spending, consumption, net exports and investment B) All injections C) Savings, taxes and imports D) Savings and consumption E) Indirect business, corporate and individual income taxes Table 19-5 Stage of Production Price Seller Steel mill Auto manufacturer Auto dealer Buyer Auto manufacturer Auto dealer Consumer $10,000 18,000 25,000 3 Consider the table above showing three stages of production of an automobile. 19) Refer to Table 19-5. The value of each automobile in gross domestic product equals A) $7,000 C) $18,000 B) $15,000. D) $25,000. Section V Unemployment 20) Unemployment statistics tend to be underestimated because of A) non-workers collect unemployment benefits B) unemployed college dropouts C) discouraged workers D) the inclusion of teenagers from 16-19 years of age in the unemployment raExplanation / Answer
16. option A
By definition, the final market value of a good is basically sum of all value added at all stages of production.
17 Option D
Basically depreciation represents the amount of investment the country needs to undertake to maintain its capital stock.
18 Option D
Disposable Income = Consumption + Savings
19 Option D
Value added in stage 1 = (10000-0) = 10000
Value added in stage 2 = (18000-10000) = 8000
Value added in stage 3 = (25000-18000) = 7000
GDP = 10000 + 8000 + 7000 = $25,000
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