Question

If you buy a burger and fries at your favorite fast food restaurant:___________

Answer 1

Answer:

A. then GDP will be higher, but consumption spending will be unchanged.

Step-by-step explanation:

GDP is the monetary value of all the finished goods and services produced within a country in a specific time period by the country's citizens and foreigners.

It is primarily used to assess the health of a country's economy and it is calculated by adding the following figures together:

1. personal consumption
2. private investment
3. government spending; and
4. exports

The burger and fries are services provided by the restaurant, which added value to the economy by increasing the GDP.

However, the consumption spending will not be affected because you would have eaten at home had you not bought the meal at the restaurant.

Therefore, the correct option is A " then GDP will be higher, but consumption spending will be unchanged".