Exploring Macroeconomics
8th Edition
ISBN: 9781544337722
Author: Robert L. Sexton
Publisher: SAGE Publications, Inc
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Question
Chapter 11, Problem 8P
To determine
(a)
To explain:
The way Gross National Product should be compared of to
To determine
(b)
To explain:
The comparison of Gross National Product to Gross Domestic Product when earnings of foreigners and foreign firms in the United States exceeds the earnings of American citizens and firms overseas.
To determine
(c)
To explain:
The comparison of Gross National Product to Gross Domestic Product when earnings of foreigners and foreign firms in the United States are less than the earnings of American citizens and firms overseas.
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Students have asked these similar questions
I. The sale of a house from an existing homeowner to an
incoming homeowner in a subdivision is included in the
computation of GDP
II. The purchase of stocks and bonds is not included in the
computation of GDP
III. Broker's commissions for the sale of financial
instruments is included in the computation of GDP
IV. The lawyer's fees to facilitate the transfer of title of an
existing house from one homeowner to another is
included in the computation of GDP
O Only Statement Il is false
O Only Statement I is false
All Statements are false
Only Statements III and IV are true
O All Statements are true
You are an economist calculating the Gross Domestic Product of Oman. To calculate GDP, you will __________.
a.
Divide the price with the quantity of all the products and services produced in Oman.
b.
Subtract the price with the quantity of all the products and services produced in Oman
c.
Add the price and quantity of all the products and services produced in Oman
d.
Multiply the price with the quantity of all the products and services produced in Oman.
Which of the following transactions or activities would be counted in your country’s GDP? Explain your answers.
A transportation company acquires a fleet of second-hand vehicles.
The same transportation company acquires 1.000 gallons of gas from a foreign company deducted from the net export component of GDP.
You buy 10 short-term government bonds.
A mining company acquires new government licenses to drill in land the company already owns.
You pay for a new haircut at your local hairdresser.
Foreign residents buy a bundle of your country’s food specialties on an online retail site.
Your parents spend a whole day cooking meals to be handed out to their poorer neighbors.
The local government acquires furniture for newly built schools.
Two telecommunications companies merge.
A non-profit organization buys an apartment to lodge their headquarters.
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Similar questions
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- Indicate whether each of the following transactions is included or not included in the GDP of the United States. a. A textbook is purchased by a student in New Jersey in yesterday. The book was made Hawaii just last week. b. Forty pounds of apples grown by a Washington farmer and traded this morning to his neighbor for ten pounds of honey. c. A hundred dollars paid to you for babysitting last night at a home near the university. The $100 was in cash with no records kept, i.e., under the table. d. The $90 purchase of materials by you made today at the Home Depot in Springfield. You plan to build a doghouse in your backyard yourself. The doghouse is for your dog. e. A fighter jet produced in Texas last month and sold this morning to Saudi Arabia. f. Eight tons of coal mined in West Virginia last month was sold today to a power plant in Tennessee. The power plant immediately started using the coat to generate power for over 30,000 homes and businesses in the Nashville area. g. Tom retired…arrow_forwarda)A caterpillar tractor is made by a U.S firm producing in the United States. Is this production counted in GDP? b) A Toyota Avalon is made by a Japanese firm producing in the United States. Is this production counted in GDP? c) Brooks running shoes are made by a U.S firm producing in China. Is this production counted in GDP?arrow_forwardUsing the following national income accounting data, compute (a) GDP, (b) NDP, and (c) NI. All figures are in billions. Category Billions Compensation of employees $226.2 U.S. exports of goods and services 19.8 Consumption of fixed capital 11.8 Government purchases 59.4 Taxes on production and imports 14.4 Net private domestic investment 52.1 Transfer payments 13.9 U.S. imports of goods and services 16.5 Personal taxes 40.5 Net foreign factor income 2.2 Personal consumption expenditures 249.1 Statistical discrepancy 0.0 Instructions: Round your answers to 1 decimal place. a. GDP = $ billion b. NDP = $ billion c. NI= $ billionarrow_forward
- How would each of the following transactions affect the GDP of the United States (Increase, decrease, or does not change)? The U.S. government pays $1 billion in salaries for government workers. GDP will... The U.S. government pays $1 billion to Social Security recipients. GDP will... The U.S. government pays a U.S. firm $1 billion for newly produced airplane parts. GDP will... The U.S. government pays $1 billion in interest to holders of U.S. government bonds. GDP will...arrow_forwardGDP can be calculated by all of the following methods except… a) Adding up the spending on goods and services by business, government, households, and foreigners,and subtracting imports.b) Adding up the “value added” at every stage of production in the economy.c) Adding up all of the receipts of households, government, and business.d) Adding up all income and expenses by consumers and businessesarrow_forwardThe GNP of a country is $200 billion, receipts of factor income from the rest of the world are $10 billion, payments of factor income to the rest of the world are $30 billion, and depreciation is $25 billion. What is the GDP and the Net National Product?arrow_forward
- Which of the following would not be counted in the calculation of GDP? Select all that apply. A. purchasing a puppy from a farmer with a reputation for not paying taxes B. washing your clothes C. government spending on social security D. buying a brand new car E. paying for a chef to cook your meals F. paying for a flight to Las Vegasarrow_forwardA US company produces $20000 worth of shirts in 2019. However, only $15000 worth of the shirts are sold to consumers in 20019 and the rest are still lying at the producer’s warehouse. Group of answer choices 1. The entire $20000 worth of shirts should be added to Consumption when calculating 2019 GDP 2. The $5000 worth of unsold shirts should be added to Exports when calculating 2019 GDP 3. The entire $20000 worth of shirts should be added to Investment when calculating 2019 GDP 4. The $5000 worth of unsold shirts should be added to Investment when calculating 2019 GDParrow_forwardUsing the following national income accounting data, compute GDP, NDP, and NI. All figures are in billions. Round your answers to one decimal place. category value compensation of employees $ 196.2 U. S. exports of goods and services 19.8 Consumption of fixed capital 11.8 government purchases 59.4 taxes on production and imports 14.4 net private domestic investment 52.1 transfer payments 13.9 U. S. imports of goods and services 16.5 personal taxes Net foreign factor income Personal consumption expenditures Statistical discrepancy 40.5 2.2 219.1 0arrow_forward
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