Question

The government of Wrexington, a country which has adopted American GDP accounting conventions, reported that GDP in quarter 3 was $12 billion at an annual rate. This means that the market value of all final goods and services produced within Wrexington in quarter 3 was

A.$3 billion.
B.$4 billion.
C. $12 billion.
D. $48 billion.

Answer 1

The correct answer is A. $3 billion, which represents the actual GDP of Wrexington for quarter 3 when the annual rate is divided by 4.

Step-by-step explanation:

When a government reports that the GDP for a certain quarter was a certain amount at an annual rate, it means that if the economy were to perform at the same rate for an entire year, the total GDP would be that annual rate. In the case of Wrexington, the reported GDP of $12 billion at an annual rate specifically refers to the market value of all final goods and services produced within the country in quarter 3, but annualized. To determine the actual GDP for just quarter 3, we would divide the annual rate by 4, since there are 4 quarters in a year.

The correct answer is: A. $3 billion. This is because $12 billion (the annual rate) divided by 4 (the number of quarters in a year) equals $3 billion, which is the GDP for just quarter 3.

Answer 2

C. $12 billion.

Step-by-step explanation:

GDP refers to the Gross domestic product. It means that the market value of all final goods and services produced within the country.

Since in the question the GDP reported in quarter 3 was $12 billion and the same is to be considered as a GDP because it reflected the market value of all final goods and services

Therefore, the correct option is c.