6 A stove is produced by a firm in 2014 added to the firms i

6. A stove is produced by a firm in 2014, added to the firm\'s inventory in 2014, and sold to a household in 2015. It follows that a. the value of the good is added to the investment category of 2014 GDP, added to the consumption category of 2015 GDP, and subtracted from the investment category of 2015 GDP b. the value of the good is added to the investment category of 2014 GDP, added to the consumption category of 2015 GDP, and not included in the investment category of 2015 GDP c. the value of the good is added to the investment category of 2014 GDP, subtracted from the consumption category of 2015 GDP, and not included in the investment category of 2015 GDP d. the value of the good is added to the investment category of 2014 GDP, subtracted from the consumption category of 2015 GDP, and added to the investment category of 2015 GDP 7. If total spending rises from one year to the next, then a. the economy must be producing a larger output of goods and services. b. goods and services must be selling at higher prices. c. either the economy must be producing a larger output of goods and services, or goods and services must be selling at higher prices, or both. d. employment or productivity must be rising. 8. Real GDP is the yearly production of final goods and services valued at a. current prices. b. constant prices. c. expected future prices. d. the ratio of current prices to constant prices. 9. When economists talk about growth in the economy, they measure that growth as the a. absolute change in nominal GDP from one period to another b. percentage change in nominal GDP from one period to another c. absolute change in real GDP from one period to another d. percentage change in real GDP from one period to another

Solution

Solution-

A stove is produced by a firm in 2014, added to the firm\'s inventory in 2014, and sold to a household
in 2015. It follows that the value of the good is added to the investment category of 2014 GDP, added to the
consumption category of 2015 GDP, and subtracted from the investment category of 2015 GDP.

The correct option is A. the value of the good is added to the investment category of 2014 GDP, added to the consumption category of 2015 GDP, and subtracted from the investment category of 2015 GDP.

Reason-

GDP means the Monentary value of the all finished goods produced within country. In this example stove is produced in 2014 so it is added in investment and also added in consumption in 2015 because consumption means use of goods and services by households, substracted from the investment of 2015 because investment means purchase of equipments by firms.

If total spending rises from one year to the next the economy is must be producing a larger output of goods and services.

The correct option is A. the economy is must be producing a larger output of goods and services.

Reason-

Total spemding means the government spending or expenditure to produced goods and services, Mostly when economy producing a larger output of goods and services total spending rises or affected mostly.

Real GDP is the yearly production of final goods and services valued at Constant Prices.

The correct option is B. Constant Prices.

Reason-

When economists talk about growth in the economy, they measure that growth as the Percentage change in real GDP from one period to another.

The correct option is D. Percentage change in real GDP from one period to another.

Reason-