Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Question
Chapter 21, Problem 10IAPA
To determine
Appearance of sale of new-homes in the circular flow of income and its impact on real GDP.
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Give typing answer with explanation and conclusion
what is the US GDP for the first quarter and second quarter of 2021? What is the personal consumption expenditures for the first quarter and second quarter of 2021?
Toyota to Shift U.S. Manufacturing Efforts
Toyota announced it planned to adjust its U.S. manufacturing operations to meet customer demands for
smaller, more fuel-efficient vehicles. In 2008, Toyota
started building a plant to produce the 2010 Prius for
the U.S. market in Blue Springs, Mississippi. Earlier
models of the Prius were produced in Asia.
Source: CNN, July 10, 2008
14. Explain how this change by Toyota will influence
U.S. GDP and the components of aggregate
expenditure.
Use the following data to work Problems 16 and 17. The table lists some macroeconomic data for
the United States in 2009.
Item Billions of dollars
Wages paid to labor 8,000
Consumption expenditure 10,000
Net operating surplus 3,400
Investment 1,500
Government expenditure 2,900
Net exports –340
Q no 16 Calculate U.S. GDP in 2009
Q no: 17 Explain the approach (expenditure or income) that you used to calculate GDP.
Chapter 21 Solutions
Foundations of Economics (8th Edition)
Ch. 21.A - Prob. 1SPPCh. 21.A - Prob. 2SPPCh. 21.A - Prob. 3SPPCh. 21.A - Prob. 4SPPCh. 21.A - Prob. 5SPPCh. 21.A - Prob. 6SPPCh. 21.A - Prob. 7SPPCh. 21.A - Prob. 1IAPCh. 21.A - Prob. 2IAPCh. 21.A - Prob. 3IAP
Ch. 21.A - Prob. 4IAPCh. 21.A - Prob. 5IAPCh. 21.A - Prob. 6IAPCh. 21.A - Prob. 7IAPCh. 21 - Prob. 1SPPACh. 21 - Prob. 2SPPACh. 21 - Prob. 3SPPACh. 21 - Prob. 4SPPACh. 21 - Prob. 5SPPACh. 21 - Prob. 6SPPACh. 21 - Prob. 7SPPACh. 21 - Prob. 8SPPACh. 21 - Prob. 9SPPACh. 21 - Prob. 10SPPACh. 21 - Prob. 1IAPACh. 21 - Prob. 2IAPACh. 21 - Prob. 3IAPACh. 21 - Prob. 4IAPACh. 21 - Prob. 5IAPACh. 21 - Prob. 6IAPACh. 21 - Prob. 7IAPACh. 21 - Prob. 8IAPACh. 21 - Prob. 9IAPACh. 21 - Prob. 10IAPACh. 21 - Prob. 11IAPACh. 21 - Prob. 12IAPACh. 21 - Prob. 1MCQCh. 21 - Prob. 2MCQCh. 21 - Prob. 3MCQCh. 21 - Prob. 4MCQCh. 21 - Prob. 5MCQCh. 21 - Prob. 6MCQCh. 21 - Prob. 7MCQ
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- What is potential GDP?arrow_forwardCountry A has export sales of 20 billion, government purchases of 1,000 billion, business investment is 50 billion, imports are 40 billion, and consumption spending is 2,000 billion. What is the dollar value of GDP?arrow_forwardWhat are the main components of measuring GDP with what is produced?arrow_forward
- 3. Categories of expenditures Tim and Alyssa Espinosa live in Swarthmore, PA. Their son, Brian, owns his own plumbing business. For each of the following transactions that occur in their lives, identify whether it is included in the calculation of U.S. GDP as part of consumption (C), investment (I), government purchases (G), exports (X), or imports (M). Check all that apply. Transaction G M Brian buys a new set of tools to use in his plumbing business. Tim buys a sweater made in Guatemala. Alyssa gets a new video camera made in the United States. Tim's employer assigns him to provide consulting services to an Australian firm that's opening a manufacturing facility in China. The state of Pennsylvania repaves highway PA 320, which goes through the center of Swarthmore. - O O O U O o Oarrow_forwardNew U.S. home sales surged Purchases of new U.S. homes surged in December and 2015 was the best year for housing since 2007. Existing-home sales also increased in the best year since 2006. The inventory of existing homes on the market was smaller than demand. Source: Bloomberg, January 28, 2016 Where do sales and inventories of existing homes appear in the circular flow of expenditure and income? Explain how an increase in sales of existing homes and a low inventory of existing homes affects real GDP. Sales and inventories of existing homes in the circular flow of expenditure and income and GDP. O A. are not part of current expenditure, so they do not appear; do not influence O B. appear as a flow of investment from firms through goods markets to households; increase O C. appear as a flow of investment from households through factor markets; increase O D. are part of the flow of investment, so they do appear; increase O E. appear as a flow of consumption expenditure from households to…arrow_forward72. Which of the following expenditures would increase the consumption component of GDP? A. You buy a new house. B. You buy a pizza. C. You buy 1,000 shares of stock. D. You buy a used book about financearrow_forward
- 3. Categories of expenditures Darnell and Eleanor Cohen live in Conshohocken, PA. Their son, Jacques, owns his own plumbing business. For each of the following transactions that occur in their lives, identify whether it is included in the calculation of U.S. GDP as part of consumption (C), investment (I), government purchases (G), exports (X), or imports (M). Check all that apply. Transaction Darnell buys a sweater made in Guatemala. Darnell's employer assigns him to provide consulting services to an Australian firm that's opening a manufacturing facility in China. Eleanor gets a new video camera made in the United States. The Pennsylvania Department of Transportation, a state administration, fixes potholes along PA highway 23, which feeds into the center of Conshohocken. Jacques buys a new set of tools to use in his plumbing business. с □ I □ G □ X □ M □ □arrow_forwardQuestion 4 If total spending rises from one year to the next, then which of the following could not be true? b.the economy is producing a larger output of goods and services, and goods and services are selling at lower prices c.the economy is producing a larger output of goods and services, and goods and services are selling at higher prices a.the economy is producing a smaller output of goods and services, and goods and services are selling at higher prices d.the economy is producing a smaller output of goods and services, and goods and services are selling at lower pricesarrow_forward1) Explain how GDP is used in the calculation of a recession or economic growth. What is a recession? How do you know whether an economy is growing or not? 2) Explain why intermediate goods are not counted in the calculation of GDP. What is an intermediate good?arrow_forward
- Q no: 17 Explain the approach (expenditure or income) that you used to calculate GDP? Use the following data to work question 17. The table lists some macroeconomic data for the United States in 2009.Item Billions of dollarsWages paid to labor 8,000Consumption expenditure 10,000Net operating surplus 3,400Investment 1,500Government expenditure2,900Net exports –340arrow_forward4. Measuring GDP The following table shows data on consumption, investments, exports, imports, and government expenditures for the United States in 2020, as published by the Bureau of Economic Analysis. All figures are in billions of dollars. Fill in the missing cells in the table to calculate GDP using the expenditure approach. Consumption (C) Investment (I) Exports (X) Imports (M) Net Exports of Goods and Services Government Purchases (G) Gross Domestic Product (GDP) Data (Billions of dollars) 14,047.6 3,637.8 2,123.4 2,774.6 3,859.5arrow_forward3. Calculate GDP for an economy with exports of $5 trillion, investment of $1.5 trillion, consumption spending of $11 trillion, imports of $6 trillion, government purchases of $3 trillion.arrow_forward
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