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Problem 1: Assume Country Z only produces hot dogs and buns. Given the table below, what is the value of GDP in Country Z?
Production Price 4 hot dogs $1.00
4 buns
A. $1.50
B. $12.00
C. $6.00
D. $8.00
E. $4.50
Problem 2: If XYZ Corporation buys an original Matisse painting to hang in its board room, then
A. GDP decreases by the amount of the purchase because C decreases.
B. GDP increases by the amount of the purchase because I increases.
C. GDP is unaffected because it is a second-hand sale.
D. GDP decreases because I decreases.
E. I increases, but C decreases.
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