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Business, 16.06.2020 23:57 brooklynunderwood46

Suppose a community spends $1 million on salaries and equipment for its police department. Because it believes that citizens are now more law abiding, the community decides to cut back on the number of police it employs. As a result, the community now spends $800,000 less on the police officers. The crime rate remains the same. What happens to measured GDP?

a. GOP increases by $800,000
b. GOP tals by $200,000.
c. GDP talls by $800,000.
d. GDP does not change

Does this change in GDP aocurately refect welfare in this case?

a. No. because the crime rate has not changed.
b. Yes, because the oommunity is spending less on police oficers
c. No because the community is spending less on police oficers.
d. Yes, because saving on the police officers can now spent on welfare

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