1.Which of the following is included in GDP?

a. A tax refund from the federal government

b. Used autos purchased by consumers

c. Social security payments

d. A mechanic repairs his own vehicle

e. Hair clippers purchased by a barber for his barber shop

2.Which of the following would not be an example of an investment good included in GDP?

a. A purchase of existing Coca-Cola stock

b. Renovation of McDonald's in Stonestown

c. A new fax machine for a travel agency.

d. Increase in inventory

e. A new home purchased by a family

3.As price level rises and money demand increases, nominal interest rates rise as well. Based on the interest rate effect, what is the likely outcome of this change?

a. Output demanded in the U.S. increases and firms increase production

b. Output demanded in the U.S. decreases and firms decrease production

c. Aggregate demand increases

d. Aggregate demand decreases

e. Long-run aggregate supply decreases.