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Stels [109]
3 years ago
5

Which of the following does NOT add to U.S. GDP? Air France buys a plane from Boeing, the U.S. aircraft manufacturer. General Mo

tors builds a new auto factory in North Carolina. The city of New York pays a salary to a policeman. The federal government sends a Social Security check to your grandmother
Social Studies
1 answer:
algol133 years ago
7 0

Answer: The federal government sends a social security check to your grandmother.

Explanation: An economy is made up of many agents (companies, individuals, government), most of which produce goods or services. Each good or service has a certain value. Assume an economy made up of two companies, one of which produces corn and the others uses corn to make oil. The first company pays $20 to its workers and sells its production to the company 2 to $100. Company 2 pays $50 to its workers and sells its production for $200.

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Before the establishment of the Federal Reserve System, the West was faced with financial crises. There were instances ok which there were a form of crises which led to fears and worries by bank customers. The people ran to their banks to withdraw their deposits. The failure of one bank often had a ripple effect in which customers of other banks rushed to withdraw funds from their own banks even if those banks were not involved in the crisis.

Banks needed a source of emergency reserves to prevent customer fears and banks being driven out of business.

This led to the set up of the Federal Reserve Act.

The Federal Reserve System was created to tackle these banking issues and also to make possible fostering a sound banking system and healthy economy.

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