Economics: Principles & Policy
14th Edition
ISBN: 9781337696326
Author: William J. Baumol; Alan S. Blinder; John L. Solow
Publisher: Cengage Learning
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Chapter 22.A, Problem 3TY
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Using the following information, calculate the GDP at Market Price
Sales 2000
Intermediate consumption 500
Change in inventory 10
Production Tax 20
Production Subsidies 5
Which of the following statements best describe how economists calculate GDP?
Group of answer choices
Economists at the Census bureau collect data from surveys sent to consumers, private firms and government agencies and add them up on a yearly basis.
Economists at the Bureau of Economic Analysis pull together data on sales, imports, exports, government purchase and investments from various government sources every 3 months.
Economists at the Bureau of Labor Statistics collect data from surveys sent to consumers, private firms and government agencies and add them up every 3 months.
Economists at the Congressional Budget Office calculate GDP for a given year by adjusting the previous year’s GDP with inflation.
Suppose the information in the following table is for a simple economy that produces only four goods and services: shoes, hamburgers, shirts, and cotton. Assume that shoes, hamburgers, and shirts are final goods and that all the cotton is used in the production of shirts. Calculate the GDP deflator for 2015. Use 2009 as the base year for the calculations. Provide your answer as a number rounded to two decimal places. Do not include any symbols, such as "$," "=," "%," or "," in your answer.
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Economics: Principles & Policy
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- Which of the following are included in GDP calculations? a. Cleaning services performed by Molly Maid Corporation b. Lawn-mowing services performed by a neighborhood child c. Drugs sold illegally on a local street comer d. Prescription drugs manufactured in the United States and sold at a local pharmacy e. A rug woven by hand in Turkey f. Air pollution that diminishes the quality of the air you breathe g. Toxic-waste cleanup performed by a local company h. Car parts manufactured in the United States for a car assembled in Mexico i. A purchase of 1,000 shares of IBM stock j. Monthly Social Security payments received by a retireearrow_forwardList some of the reasons why economists should not consider GDP an effective measure of the standard of living in a county.arrow_forwardIf a country produces the following items during the year, calculate GDP.Item Quantity Price Market Value(Quantity x Price)Cars 10 $20,000Computers 100 $1, 000Books 1,000 $10GDP =arrow_forward
- Use the following table to find the missing values: GDP Chart.pdf For each of the following determine if the item is counted in GDP: (a) Eggs you buy at the supermarket to make pancakes with for your kids for breakfast. (b) Eggs the local diner buys to make pancakes with to sell to customers. (c) A motherboard that Dell buys to put in the laptops they make. (d) A used car that a salesman sells off the lot at a car dealership. (e) A tow bar that the county airport buys to move airplanes around on the ramp.arrow_forwardFor the purpose of calculating GDP, investment is spending on real estate and financial assets such as stocks and bonds. Group of answer choices True Falsearrow_forwardWhich of the following is NOT included in Canadian GDP calculations? air pollution that contaminates the air you breathe car parts manufactured in Canada for assembly of a car in Mexico toxic waste cleanup performed by a local company cleaning services performed by a local cleaning companyarrow_forward
- GDP = $ Billion Use the data below to calculate GDP using the income approach. (I intentionally left out some of the expenditure categories so that you must use the income approach). All figures are in billions of dollars: Gross Private Domestic Investment 848.3 Proprietor's Income 413.9 Dividends 190.6 Wages and Salaries 3183.1 Undistributed Corporate Profits 62.3 Corporate Income Taxes 199.6 Imports 638.6 Government Expenditures | 1296.2 Rents 51.9 Transfer Payments 693.1 Exports 562.6 Indirect Business Taxes 447.4 Consumption of fixed capital (depreciation) 778.3 Net foreign factor income earned in the U.S. 33.7 Social Security Contributions 483.6 Interest 429.5 Personal Taxes 591.9 ....arrow_forwardYour aunt, who lives in Royal Oak decides to buy a new, American made dress. In GDP accounting this expenditure counts as Question 5 options: a) export spending b) investment spending c) consumption spending d) government spendingarrow_forwardDefine GDParrow_forward
- Consider the following data on U.S. GDP: GDP Year (Billions of current dollars) (Billions of 2012 dollars) 2014 17,521.7 16,899.8 2015 18,219.3 17,386.7 2016 18,707.2 17,659.2 2017 19,485.4 18,050.7 2018 20,494.1 18,566.4 Source: "National Economic Accounts."U.S. Bureau of Economic Analysis. The percentage change in nominal GDP from 2016 to 2017 was The percentage change in real GDP from 2017 to 2018 was True or False: The percentage change in real GDP from 2017 to 2018 was higher than the percentage change in real GDP from 2016 to 2017. O True O Falsearrow_forwardThe expenditure and value-added approaches to calculating GDP arrive at the same final number, but they reach that number in different ways. To illustrate, consider the possible effects of the following set of transactions on GDP:arrow_forward
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