ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Transcribed Image Text:(D) Why do we need three measures of GDP? Explain briefly why each of the three
measures is useful in its own way.
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- 3. Use the data table to answer the question that follows: Year Nominal GDP GDP Deflator 160 1 2 $640 billion $1050 billion 175 By how much did the value of output, adjusted for inflation, change from year 1 to year 2? A - $200 billion B- $410 billion C- $179 billion D- $400 billion E- $600 billion Question 4(Multiple Choice Worth 2 points)arrow_forward2 Calculate GDP for the Yukon Economy Using 3 Methods Consider the Yukon territory, which is very isolated and thus a closed economy. It has two producers (one of potatoes (a farmer) and the other of fried potatoes (a cafe)) a government that administers the postal service, and a consumer. Use the Yukon's national accounts data, given below, to calculate GDP using the product approach, the income approach, and the expenditure approach. Do this by filling out the tables provided below the national accounts data. Table 2: Yukon National Accounts Firms Government Consumer Potato Producer Breakfast Cafe Total Revenue 4 Total Revenue Tax Revenue | 3 Wage Income 6. Interest on Loan 1 Cost of Potatoes 1 Wages 3 Interest Income Wages 1 Wages Taxes Taxes Taxes 1 Profits Distributed from Prod. 1 Table 3: GDP Calculations (for you to complete) Product Approach Expenditure Approach Income Approach Value added of... Consumption Wage Income Potato Producer Investment After-Tax Profits Breakfast Cafe…arrow_forward2. Activities included (and not included) in the calculation of GDP The gross domestic product (GDP) of the United States is defined as the all in a given period of time. Based on this definition, indicate which of the following transactions will be included in (that is, directly increase) the GDP of the United States in 2020. 2020 GDP Included Excluded Scenario An accountant starts a client's 2020 tax return on April 14, 2021, finishing it just before midnight on April 15, 2021. Treetopplers, a U.S. lumber company, produces wood at a plant in Oregon on September 25, 2020. It sells the wood to Buildit and Partners, a developer, for use in the production of a new house that will be built in the United States in 2020. (Note: Focus exclusively on whether production of the wood increases GDP directly, and ignore the effect of production of the new house on GDP.) Fastlane, a Japanese automobile company, produces a sedan at a plant in Indiana on December 14, 2020. A family buys the sedan on…arrow_forward
- 5. Limitations of GDP Although GDP is a reasonably good measure of a nation's output, it does not necessarily include all transactions and production for that nation. Which of the following scenarios are either not accounted for or measured inaccurately by either the income or the expenditure methods of calculating GDP for the United States? Check all that apply. The value of babysitting services, when the babysitter is paid in cash and the transaction isn't reported to the government The costs of air and water pollution Federal government paychecks to soldiers The variety of goods available to consumers When a U.S. company purchases and imports wood from Brazil to use to build new houses within the United States, this purchase increases the component of GDP while also net exports by the same amount. Therefore, the purchase of wood from Brazil causes in US GDP.arrow_forward6. Limitations of GDP Although GDP is a reasonably good measure of a nation's output, it does not necessarily include all transactions and production for that nation. Which of the following scenarios are either not accounted for or measured inaccurately by either the income or the expenditure methods of calculating GDP for the United States? Check all that apply. The costs of overfishing and other overly intensive uses of resources O Federal government paychecks to soldiers The value of babysitting services, when the babysitter is paid in cash and the transaction isn't reported to the government The leisure time enjoyed by households When a U.S. company purchases and imports wood from Brazil to use to build new houses within the United States, this purchase increases the component of GDP while also net exports by the same amount. Therefore, the purchase of wood in US GDP. from Brazil causesarrow_forward3. Limitations of GDP Although GDP is a reasonably good measure of a nation's output, it does not necessarily include all transactions and production for that nation. Which of the following scenarios are either not accounted for or measured inaccurately by either the income or the expenditure methods of calculating GDP for the United States? Check all that apply. The quality of goods available to consumers The loss of enjoyment people incur when scenic land is converted to commercial use The value produced when you wash your own car at home O Federal government paychecks to soldiers When a U.S. company purchases and imports electronic parts from China to use to produce smartphones within the United States, this purchase increases the component of GDP while also net exports by the same amount. Therefore, the purchase of electronic parts from China causes in US GDP.arrow_forward
- 3 Explain what happens to the official measure of GDP in each of the following situations. a. Air quality improves significantly throughout Canada, but there are no effects on aggregate production or on market prices of final goods and services. As a result of this, GDP b. The Canadian government spends considerably less on antipollution efforts this year than it did in recent years. As a result of this, GDP c. The quality of cancer treatments increases, so patients undergo fewer treatments, which hospitals continue to provide at the same price per treatment as before. As a result of this GDParrow_forwardno handwritten notes!arrow_forward2. Limitations of GDP Although GDP is a reasonably good measure of a nation's output, it does not necessarily include all transactions and production for that nation. Which of the following scenarios are either not accounted for or measured inaccurately by either the income or the expenditure methods of calculating GDP for the United States? Check all that apply. The components of an MP3 player that are produced in China The value produced by doing your own laundry Funds spent by city governments to renovate their buildings The costs of overfishing and other overly intensive uses of resources The leisure time enjoyed by Americansarrow_forward
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