1. Problems and Applications Q1Indicate what components of GDP (if any) each of the following transactions would affect. Check all that apply.TransactionYou buy a new Toshiba computer.Your parents buy a new house from a local builder.Dell sells a desktop computer from its inventory to the Johnsonfamily.Honda expands its factory in Ohio.You pay a hairdresser for a haircut.Uncle Henry buys a new refrigerator from a domestic manufacturer.California hires workers to repave Highway 101.The federal government sends your grandmother a Social Securitycheck.Consumption InvestmentDDDDOOLDOGovernmentPurchasesECOOCNetExportsODDODO O0

The GDP is comprised of four elements, which includes the personal consumption, business investment,…

Answered: Indicate what components of GDP (if…

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter15: Measuring A Nation's Income

Section: Chapter Questions

Problem 1PA

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Which of the following are included in GDP calculations? a. Cleaning services performed by Molly Maid Corporation b. Lawn-mowing services performed by a neighborhood child c. Drugs sold illegally on a local street comer d. Prescription drugs manufactured in the United States and sold at a local pharmacy e. A rug woven by hand in Turkey f. Air pollution that diminishes the quality of the air you breathe g. Toxic-waste cleanup performed by a local company h. Car parts manufactured in the United States for a car assembled in Mexico i. A purchase of 1,000 shares of IBM stock j. Monthly Social Security payments received by a retiree
Which of the following are included in this year’s GDP? Which are excluded or included. a. Interest received on an AT&T corporate bond: b. Social Security payments received by a retired factory worker: c. Unpaid services of a family member who painted the family home: d. Income of a dentist from the dental services she provided: e. A monthly allowance that a college student receives from home: f. Money received by Josh when he resells his nearly brand-new Honda automobile to Kim: g. The publication and sale of a new college textbook: h. An increase in leisure resulting from a 2-hour decrease in the length of the workweek, with no reduction in pay: i. A $2 billion increase in business inventories: j. The purchase of 100 shares of Alphabet (the parent company of Google) stock:
For each of the following scenarios, tell whether GDP would change and how each of the components of GDP would be affected. Honda expands its factory in Marysville, Ohio. You buy a bucket of fried chicken. Cousin Fred buys a newly built house. A family buys a new washing machine made this year in this country. Chrysler sells a Jeep from its inventory to an American household. California repaves Highway 101. An Italian household buys a bottle of California wine. In the Land of Milk and Honey, they produce two goods: Milk and Honey. In 2014, milk cost $2 a gallon and they produced 20 gallons. Honey cost $1 a pint and they produced 40 pints. In 2015, milk cost $2 a gallon and they produced 24 gallons. Honey cost $1 a pint and they produced 48 pints. In 2016, milk cost $2.50 a gallon and they produced 24 gallons. Honey cost $1.25 a pint and they produced 48 pints. The base year is 2015. During which time period did standard of living improve more? From 2014 to 2015 or From 2015 to…
Which of the following would be captured and included in the calculation of GDP? A) The cost of hospital stays. The rise in life expectancy over time. (C) Child care provided by a licensed day care center. Child care provided by a grandmother at home. A used car sale to the Brown family. A new car sale to the Brown family. (G) The greater variety of cheese available in supermarkets. The iron that goes into the steel that goes into a refrigerator bought by the Brown family.
Adam lives in California and, after graduating college, opened up an ice cream business on the Venice Beach boardwalk. Which items are not counted in GDP? Select all that apply and explain why each of the items you selected is not counted in GDP. a. Adam purchases a new sub-zero refrigerator for his ice cream shop. b. The neighborhood kids broke Adam's window at the ice cream shop during a baseball game. Adam replaces the window. c. After a successful summer, Adam travels to Egypt to visit the Red Sea. d. Adam sells his used accounting textbook to his best friend Billy. e. Adam spends a Saturday afternoon mowing his elderly neighbor's lawn. He earns $100 cash that day.
Which of the following transactions should or should not be counted in GDP? Answer Yes or No and briefly explain your answer. Answers without explanation will not be considered in grading, even if they are correct. a. You buy a pair of new cowboy boots on a trip to Texas b. You buy a pair of vintage cowboy boots from your cousin in El Paso c. A cat burglar sells $10,000 of stolen jewelry to a fence d. Amazon issues $1 billion worth of new shares e. GM purchases $100 million worth of tires from Firestone f. A private company builds a new road in Memphis Y g. Stay-at-home parents provide an estimated $500 million of child care services
Which of the following statements best describe how economists calculate GDP? a. Economists at the Census bureau collect data from surveys sent to consumers, private firms and government agencies and add them up on a yearly basis. b. Economists at the Bureau of Economic Analysis pull together data on sales, imports, exports, government purchase and investments from various government sources every 3 months. c. Economists at the Bureau of Labor Statistics collect data from surveys sent to consumers, private firms and government agencies and add them up every 3 months. d. Economists at the Congressional Budget Office calculate GDP for a given year by adjusting the previous year’s GDP with inflation. Which statement best describes the difference between Nominal and Real GDP? a. Nominal GDP is Real GDP that has been adjusted to remove the distorting effects of inflation. b. Real GDP is calculated using current market prices, while Nominal GDP is calculated using the…
Question 34 Which of the following would be not be included in the GDP of the U.S.? There is more than one correct answer to this question. You must mark all of the correct answers to receive full credit for this question. Your neighbor sells a bicyde that he purchased two years ago. O LG Chem (a Korean firm) makes batteries in the u.S. and sells them to General Motors (a U.S. firm) in the U.S. o Tesla (a U.S. firm) makes a car in China and sells it there. Honda (a Japanese firm) produces cars in the U.S. and sells them here. O Pízer (a U.S. company) makes a vaccine in Germany and sells it in Sweden. Question 35 Assume there is a reduced time preference to spend now. What change would be expected in the market for loanable funds? The supply of loanable funds would increase. O The demand for loanable funds would decrease. o The demand for loanable funds would increase. o The supply of loanable funds would decrease.
Van and Amy Cho live in Conshohocken, PA. Amy's father, Carlos, lives in Sweden. For each of the following transactions that occur in their lives, identify whether it is included in the calculation of U.S. GDP as part of consumption (C), investment (I), government purchases (G), exports (X), or imports (M). Check all that apply. Transaction Amy's father in Sweden orders a bottle of Vermont maple syrup from the producer's website. Amy gets a new refrigerator made in the United States. The Pennsylvania Department of Transportation, a state administration, fixes potholes along PA highway 23, which feeds into the center of Conshohocken. Van's employer upgrades all of its computer systems using U.S.-made parts. Van buys a sweater made in Guatemala. C I 0 G 0 0 X | M
Value-Added to GDP Question. Production Value of Input Value of Output Value Added Coffee Bean farming $0 A B Processing Coffee $7.00 C $3.00 Distributing Coffee D 11.50 E Selling Coffee to customers F G $4.50 a. Fill in the table above. The values for values of inputs, outputs, and value added. I listed them as A, B, C, D, E, F, G. So in your answer in the text box just type is A = ? B = ? C = ? D = ? E = ? F = ? G = ? 1. How much is added to GDP from this production activity?
As an economist with the World Bank you have been asked to measure the Gross Domestic Product for the US for 2019. You are told that the private consumption, gross domestic investment, government purchases and exports all add up to $ 24 trillion. You later learn that imports to the US in 2019 were $4 trillion. To get GDP, you should A. Ignore the $ 4 trillion because exports have already been included in the $ 24 trillion B. Add $ 4 trillion to $24 trillion because imports are used as inputs in the production of other goods in the US C. None of the above D. Subtract $4 trillion from $24 trillion because imports are not part of US domestic output
2. In the following situations, explain what is counted (or is not counted) in this year's GDP. A. you bought the latest playstation model at gameshop last year and resold it on ebay this year. B. You purchase a new copy of investing for dummies at barnes & nobel. C. you purchase a historic home using the services of a real estate D. you detail your car so it it spotless inside and out. E. you purchase a new hard drive for your old lap. F. your physical therapist received $300 for for physical therapy but reports only 100. G. Apple buys 1,000 motherboards for use in making new computers. H. Tayota produces 10,000 new camrys that remain unsold at the of the year.

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