41- Which of the following must be included in the calculation of GDP? a. The sa

Question

41- Which of the following must be included in the calculation of GDP?

     a.   The sale of a used car to an auto dealer

     b.   Bartering lawn care services for car washes

     c.   A father staying at home to attend to his child

     d.   The sale of an illegal cable box

     e.   Payment made for a SAT preparation class

42- When estimating GDP, changes in the level of inventory are calculated because:

     a.   it indicates the level of employment in the economy.

     b.   it provides information about a firm’s expectations.

     c.   it is a good indicator of the competitiveness of the economy.

     d.   it shows the level of business spending by firms.

     e.   it determines the value of goods produced in a year but not sold in that year.

43- Which of the following government agencies oversees monetary policy in the U.S.?

     a.   The Federal Reserve System

     b.   Congress

     c.   The Treasury Department

     d.   The Federal Trade Commission

     e.   The Department of Commerce

44- Which of the following is the ultimate goal of monetary policy?

     a.   Complete removal of income inequality

     b.   Economic growth with price stability

     c.   Free trade

     d.   Balanced budget

     e.   Economic welfare

45- The quantity theory of money asserts that:

     a.   changes in nominal GDP are inversely related to changes in the velocity of money.

     b.   changes in money supply are positively related to changes in the velocity of money.

     c.   changes in the money supply are unrelated to changes in the price level.

     d.   changes in the output level are unrelated to changes in the price level.

     e.   changes in the money supply are directly related to changes in nominal GDP.

Explanation / Answer

41) Payment made for a SAT preparation class  must be included in the calculation of GDP.So correct option is e

42)When estimating GDP, changes in the level of inventory are calculated because it determines the value of goods produced in a year but not sold in that year.So correct option is e

43)The Federal Reserve System oversees monetary policy in the U.S.So correct option is a

44) Economic growth with price stability is the ultimate goal of monetary policy.So correct option is b

45)The quantity theory of money asserts that  changes in the money supply are directly related to changes in nominal GDP.So correct option is e

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