Macroeconomics (12th Edition) (Pearson Series in Economics)
12th Edition
ISBN: 9780133872644
Author: Michael Parkin
Publisher: PEARSON
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Question
Chapter 4, Problem 1SPA
To determine
Classify the given items as final good or service or as an intermediate good or service.
Expert Solution & Answer
Explanation of Solution
The final goods are those used either for final consumption or for capital formation. On the other hand, the goods that are used in producing the final goods and services are called the intermediate goods.
- Airline ticket bought by a student: The airline ticket is used for airline flights. Thus, the airline ticket is an intermediate good. This is part of the consumption expenditure.
- New airplanes bought by southwest Airlines: The purchase of a new airplane can be treated as a final good. This is part of the investment expenditure.
- Cheese bought by Domino’s: The Domino’s is one of the pizza shops in the market. Therefore, they purchase cheese for preparing pizzas. Thus, it is an intermediate good. This is part of consumption expenditure.
- Purchase of a new phone: The purchase of a new phone is a final good. This is part of consumption expenditure.
- New house bought by Bill Gates: The purchase of a new house is final good. This is part of an investment expenditure.
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Students have asked these similar questions
Classify each of the following items as a final good or an intermediate good, and identify whether it is a component of consumption expenditure, investment, or government expenditure on goods and services:
Item 1. Packing boxes bought by Amazon.com.
Item 2. Starbuck's grande mocha frappuccino bought by a student.
Item 3. A new limousine for the president.
Item 4. New airplanes bought by United Airlines.
Item 1 is
and item 2 is
A. an intermediate good; a final good that is consumption expenditure
B. a final good that is consumption expenditure; a final good that is consumption expenditure
O C. a final good that is consumption expenditure; a final good that is investment
D. an intermediate good; a final good that is investment
Item 3 is
and item 4 is
O A. an intermediate good; an intermediate good
B. a final good that is government expenditure; a final good that is investment
O C. an intermediate good; a final good that is investment
O D. a final good that is government expenditure; an…
Gross domestic product (GDP) is a measurement of the total value of all goods and services produced in the United States over a given time period. It is used by economists, government officials, market forecasters and others to gauge the overall health of the U.S. economy. How do consumers drive the nation's GDP?
The following table shows data on personal consumption expenditures, gross private domestic investment, exports, imports, and government consumption expenditures and gross investment for the United States in 2007, as published by the Bureau of Economic Analysis. All figures are in billions of dollars.
Fill in the missing cells in the following table to calculate GDP.
Components
Personal Consumption Expenditures (CC)
$9,734.2
Gross Private Domestic Investment (II)
$2,125.4
Exports (XX)
$1,643
Imports (MM)
$2,351
Net exports of goods and services (X−MX−M)
Government Consumption Expenditures and Gross Investment (GG)
$2,689.8
Gross domestic product (GDP)
This method of calculating GDP, which involves summing the , is called the approach.
Chapter 4 Solutions
Macroeconomics (12th Edition) (Pearson Series in Economics)
Ch. 4.1 - Prob. 1RQCh. 4.1 - Prob. 2RQCh. 4.1 - Prob. 3RQCh. 4.2 - Prob. 1RQCh. 4.2 - Prob. 2RQCh. 4.2 - Prob. 3RQCh. 4.2 - Prob. 4RQCh. 4.2 - Prob. 5RQCh. 4.3 - Prob. 1RQCh. 4.3 - Prob. 2RQ
Ch. 4.3 - Prob. 3RQCh. 4.3 - Prob. 4RQCh. 4.3 - Prob. 5RQCh. 4 - Prob. 1SPACh. 4 - Prob. 2SPACh. 4 - Prob. 3SPACh. 4 - Prob. 4SPACh. 4 - Prob. 5SPACh. 4 - Prob. 6SPACh. 4 - Prob. 7SPACh. 4 - Prob. 8SPACh. 4 - Prob. 9APACh. 4 - Prob. 10APACh. 4 - Prob. 11APACh. 4 - Prob. 12APACh. 4 - Prob. 13APACh. 4 - Prob. 14APACh. 4 - Prob. 15APACh. 4 - Prob. 16APACh. 4 - Prob. 17APACh. 4 - Prob. 18APACh. 4 - Prob. 19APACh. 4 - Prob. 20APACh. 4 - Prob. 21APACh. 4 - Prob. 22APACh. 4 - Prob. 23APACh. 4 - Prob. 24APACh. 4 - Prob. 25APACh. 4 - Prob. 26APACh. 4 - Prob. 27APA
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