Transaction Uncle John receives a check from the federal government for unemployment insurance benefits. You pay a hairdresser for a haircut. New York hires workers to plow snow after a snowstorm. Uncle Henry buys a new refrigerator from a domestic manufacturer. Uncle John orders 10 new computers for his finance business. Ford sells a Mustang from its inventory to the Martinez family. ☐ ☐ ☐ Government Net Consumption Investment Purchases Exports ☐ U 0 ☐ ☐ ㅁ ☐ ☐ ☐

Transaction Uncle John receives a check from the federal government for unemployment insurance benefits. You pay a hairdresser for a haircut. New York hires workers to plow snow after a snowstorm. Uncle Henry buys a new refrigerator from a domestic manufacturer. Uncle John orders 10 new computers for his finance business. Ford sells a Mustang from its inventory to the Martinez family. ☐ ☐ ☐ Government Net Consumption Investment Purchases Exports ☐ U 0 ☐ ☐ ㅁ ☐ ☐ ☐

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter19: Measuring Economic Performance

Section: Chapter Questions

Problem 3P

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You are given the following information about an economy:$millionsDerive the following:(i) National Income (ii) Net Investment (iii) Personal Income (iv) Disposable Income (v) Household Consumption Expenditure GDP at Market Prices 1,,669.4Imports 290.5Gross Domestic Capital Formation 48.7Income accruing to the Public Sector 39.0Retained Business Earnings 75.9Exports 273.4Subsidies 16.8Factor Payments from Abroad 10.0Capital Consumption Allowance 10.5Income Payments to Foreigners 19.2Direct Taxes 355.6Public Sector Consumption Expenditure 490.1Indirect Taxes 297.3Transfer Payments 25.7
A farmer grows a bushel of wheat and sells it to a Miller for $20.00. The Miller turns the wheatinto flour and then sells it to a Baker for $25.00. The Baker uses the flour to bake bread and sellsthe bread to a Musician for $40.00. The Musician eats the bread. The Musician, also growspumpkins in his backyard garden to feed his family. PLEASE ANSWER ONLY QUESTIONS D AND E. a. What is GDP? b. What is the valued added by each person? c. Should the pumpkins be included in GDP? Explain your answer.d. Why does GDP not include in goods that are resold? e. Why is it desirable for a country to have a large GDP?
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. A Picasso painting sold at an auction for $30 million b. $20 million tires purchased by Ford Motor Company c. A $100 million Initial Public Offering (IPO) by Gameboy d. A new tennis racket purchased by Roger Federer e. A new tunnel under the Hudson f. $20,000/year value of grandparents' baby-sitting their grandson g. A $15 Pizza h. A $1,200 stimulus check sent to households by the government as COVID relief
Which of the following transactions would be included in GDP?There are 2 correct answers.1. $50 cash gift you gave to your friend in a given year.2. This month, you bought $1,500 worth of stocks in Facebook (whose headquarters are located in Menlo, CA).3. This year, Sara received $600 stimulus check from the government.4. You paid $20 for a haircut in Tustin, CA this week.5. This year, Peter bought a 10-year-old home in Pasadena, CA.6. Social security benefits sent to a retired worker in a given year.7. U.S. Unemployment benefts received this year by a newly laid-off workers.8. A check for $250 send by a parent to a son at a college in California.9. A check for $250 send by a parent to a son at a college in Canada.10. Häagen-Dazs, an American company, purchases milk to produce ice cream thisyear.11. BTS is performing in Las Vegas, Nevada this year. You purchased BTS's concerttickets for next month.
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.
What is the relationship among the four expenditure components of GDP?
Which of the following transactions are or are not included in GDP? 1. The pollution created when building an electric car battery. 2. Your parent washes, dries, and folds your laundry. 3. You consume a meal at Jack in the Box. 4. You buy a Rolex watch on the streets of Redwood City. 5. You volunteer to help clean up at your church after services on Sunday. 6. You write a Yelp review of Dr. Eck's restaurant.
Use the expenditure approach to calculate GDP. GDP is _____
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.
Question 8 Which of the following would not be included in GDP? O Bob hires a construction company to build his home. Michael pays the neighbor kid to mow his yard. O Alex buys some cheese and dough to bake a pizza at home. OElyse buys some shoes.
The table below gives some of the items in the U.S. National Income and ProductAccounts in 1995.ItemAmount(trillions ofdollars)Consumption expenditure 4.97Investment 1.14Government expenditures 1.37Net exports 0.08Wages 4.20Interest, rent, and profit 1.68Depreciation 0.89a) Use the expenditure approach to calculate U.S. GDP in 1995.b) Use the income approach to calculate U.S. net domestic product at factor cost in
Which of the following are included in this year’s GDP? Explain your answer in each case.a. Interest on an AT&T corporate bond.b. Social Security payments received by a retired factory worker.c. The unpaid services of a family member in painting the family home.d. The income of a dentist.e. The money received by Smith when she sells her economics textbook to a book buyer.f. The monthly allowance a college student receives from home.g. Rent received on a two-bedroom apartment.h. The money received by Josh when he resells his current year- model Honda automobile to Kim.i. The publication of a college textbook.j. A 2-hour decrease in the length of the workweek.k. The purchase of an AT&T corporate bond.l. A $2 billion increase in business inventories.m. The purchase of 100 shares of GM common stock.n. The purchase of an insurance policy.