PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
7th Edition
ISBN: 9781260110920
Author: Frank
Publisher: MCG
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Chapter 5, Problem 5.4CC
To determine
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Suppose that 25,000 of the automobiles purchased by households are imported rather than domestically produced. Domestic production remains at 1,000,000 autos valued at $ 15,000 each. Once again, find GDP in terms of (a) the market value of production and (b) the components of expenditure.
The table below includes data for a one-year period required to calculate GDP from the income side for a teeny-tiny economy.
Gross investment expenditure
Wages and salaries
Consumption expenditure
Interest and investment income
Business profits
Depreciation
Indirect taxes less subsidies
Net exports
TABLE 20-4
$402.00
$1741.00
$1302.40
$99.40
$70.40
$199.20
$175.20
$94.00
Refer to Table 20-4. What is the value of GDP, as calculated from the income side?
$2010.00
$1982.60
$1986.00
$2584.40
$2285.20
A U.S.-owned automobile factory uses $50 million worth of materials produced in the U.S. and $10 million worth of material purchased from foreign countries to produce $100 million of automobiles. $70 million worth of these automobiles are purchased by U.S. consumers, $25 million are sold in foreign countries, and $5 million are added to inventory. How much of this production is included in U.S. GDP? By how much do these transactions alone affect U.S. net exports?
Chapter 5 Solutions
PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
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- Through the first half of 2023, total new-vehicle sales in the U.S. were up more than 12%. This sales number included medium- and heavy-duty trucks, which are more often purchased by businesses than households. Which component of GDP is affected by purchases of new vehicles by businesses? Which component of GDP is affected by purchases of new vehicles by households? Explain.arrow_forwardLast year, a small nation with abundant forests cut down $200 worth of trees. It then turned $100 worth of trees into $150 worth of lumber. It used $100 worth of that lumber to produce $250 worth of bookshelves. Assuming the country produces no other outputs, and there are no other inputs used in producing trees, lumber, and bookshelves, what is this nation's GDP? In other words, what is the value of the final goods the nation produced including trees, lumber and bookshelves?arrow_forwardWhich spending category of GDP does each of the following transactions count in? Please enter the letter C, I, G, NX, or N to represent consumption, investment, government spending, net exports, or none. The government paid a total of $30,000 in subsidies to people who had installed solar panels on their homes . Bill spent his $400 social security check on rent and food . Company X produces $5,000 of wine this year but they do not sell it . Your parents pay $8,000 for tuition to UCF . The government pays $1 million to people it hires to collect census dataarrow_forward
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