Why do we exclude intermediate goods from the calculation of GDP? A.) Intermediate goods do not add value B.) Intermediate goods are not market priced C.) Because intermediate goods are used by producers not consumers D.) To avoid double counting
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Why do we exclude intermediate goods from the calculation of
GDP ?A.) Intermediate goods do not add value
B.) Intermediate goods are not market
priced C.) Because intermediate goods are used by producers not consumers
D.) To avoid double counting
Step by step
Solved in 2 steps
- Which approach to calculating GDP focuses on summing the value added at each stage of production? a) Expenditure approach b) Income approach c) Output approach d) Value - added approachA) Write the formula for GDP (expenditure), and explain in detail eachvariable. Be sure to include types of goods/services that go into each category. B) Why are goods and services counted in GDP at market value?Are there any disadvantages or problems in using market values to measureproduction?1) Which of the four components of GDP – C, I, G, NX -- will be affected by each of the following transactions involving American Airlines ? a)You purchase a ticket on American Airlines flight to Seattle to visit your uncle. b)American Airlines purchases a new jetliner from Boeing Co located in Seattle, Washington. c)A person in France purchases a ticket to fly on an American Airlines flight from Paris to New York. d)The city of Philadelphia agrees to spend funds to extend one of the runways at Philadelphia International Airport so that American Airlines will be able to land larger jets.
- 6.) Which of the following Transactions will be included in GDP for the United States? a.) Coca-Cola builds a new bottling plant in the United States. b.) Delta sells one of its existing airplanes to Korean Air. c.) Ms. Moneybags buys an existing share of Disney stock. d.) A California winery produces a bottle of Chardonnay and sells it to a customer in Montreal, Canada. e.) An American buys a bottle of French perfume in Tulsa. f.) A book publisher produces too many copies of a new book; the books don't sell this year, so the publisher adds the surplus books inventories.Which approach to calculating GDP focuses on adding up the market value of all final goods and services produced within an economy? a) Expenditure approach b) Income approach c) Production approach d) Value- added approachIdentify whether or not each of the following transactions would be included in GDP, and if so, which method of calculating (income or expenditures), and further, which category? f. A shareholder sells $5000 of their stock to another buyer. g. A Canadian marketing agency is hired by a European company to design a marketing campaign.h. A shareholder is paid dividends.
- Which of the following is wrong? Select one: a. In the expenditures approach to GDP we subtract imports because they represent spending on production outside the borders of a country. b. Price indexes are computed by dividing the price of a specific collection or market basket of output in a particular period by the price of the same market basket in a base period and multiplying the result (the quotient) by 100. c. Exports are subtracted from imports in calculating GDP because exports are not available for domestic consumption. d. Gross private domestic investment exceeds depreciation in an economy that experiences expanding production capacity.GDP can be computed as the sum of A) all sales that have taken place in an economy over a period of time. B) the total expenditures of consumers and business over a period of time. C) the total expenditures of consumption, investment, and government expenditure on goods and services over a period of time. D) the total expenditures of consumption, investment, government expenditure on goods and services, and net exports over a period of time1) U.S. real GDP is substantially higher today than it was 60 years ago. What does this tell us, and what does it not tell us, about the well-being of U.S. residents? What are the limitations of the GDP as a measure of economic well-being? Given the limitations, why is GDP usually regarded as the best single measure of a society's economic well-being? 2) What is an intermediate good? How does an intermediate good differ from a final good? Explain why it is the case that the value of intermediate goods produced and sold during the year is not included directly as part of GDP, but the value of intermediate goods produced and not sold is included directly as part of GDP. 3) GDP is defined as the market value of all final goods and services produced within a country in a given period of time. In spite of this definition, some production is left out of GDP. Explain why some final goods and services are not included.
- a) Give the definition of GDP and explain what items are not included in its calculation?1) How do the following events influence Turkish GDP? Mothers living in Turkey take care of their pre-school child in their own home. You buy a new car from a dealer for 80,000 TL. You sell your father’s used car to a dealer for 70,000 TL. You sell your old car to a dealer for 60,000 TL. The dealer repaints it and sells it to a customer for 80,000 TL A Japanese company builds a factory in Düzce. (If this affects GDP, is it the Japanese or the Turkish GDP?) A German company buys stock in a Turkish company. An earthquake destroys many structures in Gebze industrial zone. The structures are not rebuilt this year. An earthquake destroys much of Gölcük and within a short time the town is rebuilt as it was before.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.