When the Noodlemans purchase a new residential structure,

A) GDP is unaffected.
B) investment rises by the purchase price.
C) consumption rises by the purchase price.
D) net exports fall.

Question

When the Noodlemans purchase a new residential structure,A) GDP is unaffected.B) investment rises by the purchase price.C) consumption rises by the purchase price.D) net exports fall.

Alivia Fitzsimons · Accepted Answer

Final Answer : B, Explanation :  When the Noodlemans purchase a new residential structure, investment rises by the purchase price. This is because the purchase of a new residential structure is considered investment expenditure, which adds to the overall investment in the economy. GDP is not affected directly, as GDP only includes final goods and services produced in the economy, and the purchase of a residential structure is not a final good or service. Consumption does not rise since the Noodlemans are not consuming the residential structure, but investing in it. Net exports are also not affected, as the purchase of a residential structure does not involve any international trade.

When the Noodlemans purchase a new residential structure,

A) GDP is unaffected.
B) investment rises by the purchase price.
C) consumption rises by the purchase price.
D) net exports fall.

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