Suppose that a simple economy produces only four goods and services: cars, homes, cheeseburgers and cheese. Assume all of the cheese are used in the production of the cheeseburgers. Also assume that Year 1 is the base year. The GDP deflator in year 2 is Quantity (Year 1) 50 Quantity (Year Price (Year 1) 25 100 Price (Year 2) 30 15 150 75 3 EITTT Product Cars Homes Cheeseburgers 100 50 Cheese 30 Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer. a 105.8 b 95.4 C 177.2 d 125.7
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- For each of the following transactions, determine the contribution to the currentyear’s GDP.a) On January 1, you buy 10 gallons of petrol at GHC 15 per gallon. The fillingstation purchased the petrol the previous week at wholesale price of GHC 12per gallon.b) You purchased a locally manufactured AK 47 used in the 2nd world war duringan exhibition for GHC 2million. The brokerage fee was 6% of the sale value.c) A homemaker enters the work force, taking a job that pays GHC 40,000 a year.The homemaker now hires a nanny who is paid GHC 16,000 per year.d) You are informed that you have won a lottery worth GHC 3million to be paidto you immediately.e) You are informed that you have won a lottery worth GHC 3million to be paidto you immediately. In addition, the GNL pays you GHC 5000 to appear intheir promotional advert.f) Busy internet replaces all its stock of all computers with brand new locallymanufactured computers from rLg worth GHC 100m. It sells its old computersfor GHC 40million to rLg…Question 1For each of the following situations, explain which of the four GDP components (if any) isaffected and how. a) You buy a new book published in the US.b) You buy a new book published in Australia.c) You buy the first printing of the first edition of The Great Gatsby by F. Scott Fitzgeraldpublished in 1925.d) The state of Michigan hires workers to maintain the Mackinac Bridge.e) You hire a tutor who gives you bass lessons.f) Tesla hires you as an intern to help estimate the demand for electric vehicles.g) Tesla builds a new factory in Hungary.h) Tesla builds a new factory in Pennsylvania.i) Your friend builds a house.j) The state of Ohio awards you a scholarship. Need D, E, FTable 1 contains price and quantity information for two products produced by Apple,the iPhone and Apple Watch for 2016 and 2017. Let’s assume that they were producedin the United States.Table 1: Apple Products 2016 2017 Price Quantity Price QuantityiPhone $1,200 300 $1,250 400Apple Watch $500 800 $650 850 Calculate the amount contributed by Apple to nominal U.S. GDP from the salesof the two products in 2016 and 2017. Calculate the amount contributed by Apple to real U.S. GDP from the sales ofthe two products in 2016 and 2017. Determine the growth rate of nominal GDP (if Apple were the entire economy). Determine the growth rate of real GDP (if Apple were the entire economy). Use the shortcut you learned to convert between real and nominal growth ratesto determine the growth rate of prices. Is the increase in nominal GDP due to a change in…
- General Motors Corporation (a U.S.-based firm) produced a Saab vehicle in Sweden in 2009, and sold it in the United States. In which country's GDP was the value of the manufactured Saab car included? A) The United States because GM is a U.S. company B) The United States because it was sold there C) Sweden because it was produced there D) Half the value of the car in Sweden and half in the United 5 tatesable 1 contains price and quantity information for two products produced by Apple,the iPhone and Apple Watch for 2016 and 2017. Let’s assume that they were producedin the United States.Table 1: Apple Products 2016 2017 Price Quantity Price QuantityiPhone $1,200 300 $1,250 400Apple Watch $500 800 $650 850 Calculate the amount contributed by Apple to nominal U.S. GDP from the salesof the two products in 2016 and 2017. Calculate the amount contributed by Apple to real U.S. GDP from the sales ofthe two products in 2016 and 2017. Determine the growth rate of nominal GDP (if Apple were the entire economy). Determine the growth rate of real GDP (if Apple were the entire economy). Use the shortcut you learned to convert between real and nominal growth ratesto determine the growth rate of prices. Is the increase in nominal GDP due to a change in…For each of the following transactions, determine the contribution to the currentyear’s GDP. d) You are informed that you have won a lottery worth GHC 3million to be paidto you immediately.e) You are informed that you have won a lottery worth GHC 3million to be paidto you immediately. In addition, the GNL pays you GHC 5000 to appear intheir promotional advert.f) Busy internet replaces all its stock of all computers with brand new locallymanufactured computers from rLg worth GHC 100m. It sells its old computersfor GHC 40million to rLg which resells them for GHC 60million after someminor repairs work on them.
- The country of Caspir produces only cereal and milk. Quantities and prices of these goods for the last several years are shown below. The base year is 2008. Prices and Quantities Quantity of Cereal Year Price of Cereal Price of Milk Quantity of Milk 2008 $4.00 90 $1.50 150 2010 $5.00 120 $2.50 200 In 2010, this country's Select one. O a. real GDP was $780, and the GDP deflator was 1333 Ob. real GDP was $825, and the GDP deflator was 141.0 01eal GDP was $825, and the GDP deflator was 133. d.-real GDP was $780, and the GDP deflator was 141.01. Consider an economy that produces and consumes bread and cars. The data for two differentyears are as follows:Year 2000 Year 2010Goods Quantity Price Quantity PriceCars 100 $ 50,000 120 $ 60,000Bread 500,000 $ 10 400,000 $ 20 a) Use the year 2000 as the base year, compute the Nominal GDP for each year (both 2000 and2010). b) Use the year 2000 as the base year, compute the Real GDP for each year (both 2000 and2010) c) Compute the implicit price deflator in year 2010 and use it to explain how the price level haschanged from year 2000 to 2010. (Note: implicit price deflator = GDP Deflator). 2. Consider a Cobb-Douglas production function with three inputs. K is capital (the number ofmachines), L is labor (the number of workers), and H is human capital (the number of collegedegrees among the workers) . The production function isFor each of the following transactions, determine the contribution to the current year's GDP a) On January 1, you buy 10 gallons of petrol at GHC 15 per gallon. The fillingstation purchased the petrol the previous week at a wholesale price of GHC 12per gallon b) You purchased a locally manufactured AK 47 used in the 2nd world war duringan exhibition for GHC 2million. The brokerage fee was 6% of the sale value. c) A homemaker enters the workforce, taking a job that pays GHC 40,000 a yearThe homemaker now hires a nanny who is paid GHC 16,000 per year. d) You are informed that you have won a lottery worth GHC 3 million to be paidto you immediately e) You are informed that you have won a lottery worth GHC 3million to be paidto you immediately. In addition, the GNL pays you GHC 5000 to appear in theirpromotional advert f) Busy internet replaces all its stock of all computers with brand new locallymanufactured computers from rLg worth GHC 100m. It sells its old computers for GHC 40million to…
- A hypothetical country of Lahland produces only movies and popcorn. Quantities and prices of these goods for the last several years are shown below. The base year is 2009. Prices and Quantities Year Price of Quantity of Price of Quantity of D. Movies Movies Popcorn Popcorn Tab 2009 $11.00 500 $4 900 pres 2010 $12.00 600 $5 1000 What was this country's GDP deflator in 2010? Exp Cons Select one: Da. 150 Refer the Ob 77.8 A 17 128.6 Od. 100 MG 20 Type here to search.estion 2 Which statement is INCORRECT? To calculate the US GDP, statisticians add up the market value of our output. To calculate the US GDP, statisticians add up the value of all the intermediary and final output. Statisticians use the prices of goods and services like a ruler to measure the size and growth of US output. To calculate the US GDP, statisticians add up the output produced within the country, regardless of whether the people and businesses which produce that output are nationals of other countries. All the statements are correct. A Moving to the next question prevents changes to this answer. Q 7 $ 4 R % 5 19 T tv 6 MacBook Pro Y & 7 U * 00 8 4+ I Nc ( fr O O P Question 2 of 14 > W 13 = RA #1Question 13 Which of the following is included in GDP? O revenue from the sale of a three-year old car O the receipts from a sale of O the value of lawn care service provided by a sixteen-year-old as part of his weekly chores O the fees charged for a stock broker's services