Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506725
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Chapter 7, Problem 13CQ
To determine
Identify the reason for the productive service that excludes from the account of
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When calculating GDP from the income side, which of the following is included in non-factor payments?
A wages and salaries
B GST
C income tax
D business profits
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GDP as a measure of economic welfare fails to account for certain factors, including nonmarket transactions, the underground economy, leisure, externalities, and the quality of the goods purchased. Considering this, which of the following are included in GDP calculations?
cleaning services performed by Molly Maid Corporation
lawn-mowing services performed by a neighborhood child
drugs sold illegally on a local street corner
prescription drugs manufactured in the United States and sold at a local pharmacy
a rug woven by hand in Turkey
air pollution that diminishes the quality of the air you breathe
toxic-waste cleanup performed by a local company
car parts manufactured in the United States for a car assembled in Mexico
a purchase of 1,000 shares of IBM stock
monthly Social Security payment received by a retiree
Why are intermediate goods and services excluded when calculating the value of GDP
Chapter 7 Solutions
Economics: Private and Public Choice (MindTap Course List)
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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_forwardTo calculate GDP from the income side, one must add together wages, a) government income, interest, and profits. b) consumption and depreciation. c) interest, rent, depreciation, profits and indirect taxes net of subsidies. d) investment, rent, depreciation, profits and indirect taxes net of subsidies. e) net exports, depreciation, and profits.arrow_forwardWhat's the difference between GDP and GNP ?arrow_forward
- Which of the following is not included in gdp?arrow_forwardWhich of the following transactions would be included in the official calculation of GDP under the expenditure method? You make cookies to give as a gift to your parents. You buy a new iPod for listening to music. You illegally download music off the Internet to put on your new iPod. O Bridgestone sells $2 million worth of tyres to General Motors Holden. A student buys a used textbook at the bookstore.arrow_forwardAre illegal drug sales counted in GDP?arrow_forward
- "You sell your car to a friend for $2,000 so you can buy a new car. Is this sale value included in GDP? Why or why not?"arrow_forwardWhich of the following is included in GDP? Group of answer choices the value of lawn care service provided by a sixteen-year-old as part of his weekly chores. the fees charged for a stock broker's services. cash income received by a self-employed landscaper that is not reported to the IRS. revenue from the sale of a three-year old car.arrow_forwardWhich of the following would NOT be included in GDP? US manufacturer making goods in EuropeFinal goods and servicesGoods and services produced during the current yearToyota manufacturing cars in Tennesseearrow_forward
- Calculate GDP using the Income and expenditure Approacharrow_forwardWhich of the following are included in GDP and which are not? If an item is included, state which GDP category it falls under (consumption, investment, government, trade balance) a) the cost of having your appendix removed b) buying a new car from a dealership c) buying a used car from your neighbor d) the lettuce sold to the sub shop that will go on your sandwich e) babysitting services at a licensed daycare provider f) babysitting services provided by your cousin g) a 2-year increase in life expectancyarrow_forwardIf you were in charge of regulating the way GDP is calculated, would you include illegal activities in the calculation?arrow_forward
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