L TolyLeoHLab Module Seven Homework Score 0 of 3 pts 8 of 25

L TolyLeoHLab: Module Seven Homework Score: 0 of 3 pts 8 of 25 (8 complete) HW Score: 2 Concept Question 2.4 The following transactions take place in 2000: 1. An elderly couple go to the movies and pay $80 for the tickets. 2. A family sells numerous knick-knacks at a garage sale for $55. 3. A young executive buys 100 shares of IBM for $6,000. 4. A college student receives $400 from his parents. 5. A young couple down on their luck receive food stamps worth $150 6. A plumber performs work for a neighbor and receives $75 in cash that he doesn\'t record in his company\'s records 7. A physician operates on a friend\'s husband and charges $1,000 for the operation instead of her usual $3,000 8. A teenager paints the porch on his parents\' house. The paint cost $75. The cost of hiring a professional to do the job would have been $400. 9. A high school graduate works a summer job and makes $4,500. 10. The Federal Reserve Bank sells a bond for $1,000. The addition to gross domestic product is O A. $14,055. O B. $8,335 O c. $15,335 ? D. $5,655. Click to select your answer and then click Check Answer. Clear All All parts showing

Solution

Addition to gdp= 80+1000+75+4500

= 5655

Only sale of new goods and services that are paid in actually are added in the calculation.

Sale or purchase of stock, bond and social security is not included as they are mere transfer of income from one person to another.

Plumber\'s income becomes under the table income as he has not recorded this transaction in company\'s record, which is not included.

Painting of house is not included as she is not being paid actually but the cost of paint is included.