Macroeconomics (Book Only)
12th Edition
ISBN: 9781285738314
Author: Roger A. Arnold
Publisher: Cengage Learning
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Question
Chapter 7, Problem 1VQP
To determine
Illustrate the example for double counting.
Expert Solution & Answer
Explanation of Solution
Double counting is the problem of estimating the values of goods and services more than once. During the accounting process of GDP, it includes only the final values of goods and services in an economy to avoid the problem of ‘double counting’. That means, the final value of products also includes the intermediate values of products.
For example, a firm sells cars at a cost of $28,000, and the company paid $250 for tires and $10,000 for other parts. Including all intermediate goods, the car will sell at the price of $28,000 and not by $38,250 ($28,000+ $250+$10,000). Hence, the GDP avoids double counting problem by including only the final values of goods and services.
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Chapter 7 Solutions
Macroeconomics (Book Only)
Ch. 7.1 - Prob. 1STCh. 7.1 - Prob. 2STCh. 7.2 - Prob. 1STCh. 7.2 - Prob. 2STCh. 7.2 - Prob. 3STCh. 7.4 - Prob. 1STCh. 7.4 - Prob. 2STCh. 7.4 - Prob. 3STCh. 7 - Prob. 1VQPCh. 7 - Prob. 2VQP
Ch. 7 - Prob. 3VQPCh. 7 - Prob. 4VQPCh. 7 - Prob. 5VQPCh. 7 - Prob. 1QPCh. 7 - Prob. 2QPCh. 7 - Prob. 3QPCh. 7 - Prob. 4QPCh. 7 - Prob. 5QPCh. 7 - Prob. 6QPCh. 7 - Prob. 7QPCh. 7 - Prob. 8QPCh. 7 - Prob. 9QPCh. 7 - Prob. 10QPCh. 7 - Prob. 11QPCh. 7 - Prob. 1WNGCh. 7 - Prob. 2WNGCh. 7 - Prob. 3WNGCh. 7 - Prob. 4WNGCh. 7 - Prob. 5WNGCh. 7 - Prob. 6WNGCh. 7 - Prob. 7WNGCh. 7 - Prob. 8WNG
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- please give me calculation!arrow_forwardFast please thank you 27.arrow_forwardA. It is known that the population of a community in 1995 was 230,000 people. The population continues to grow at an increasing rate for 5 years. In 2000 the population reached 300,000 people. The population continues to increase but the rate decreases until in 2007 the number reached 350,000 people. After that, the rate continued to decline for 3 years with a population of 320,000. The rate then rises again and the population reaches 280,000 in the long run.Represent this information in graphic form. B. Arteriosclerosis begins in childhood when plaque (a soft mass of fatty material) forms on the walls of arteries, blocking the flow of blood through the arteries. This can lead to heart attacks, strokes, and gangrene. If it is assumed that the aorta is cut in a cross section as shown in the figure, and has a radius of a cm in year t. Plaque thickness is assumed to be h = g(t). The open area is given by A = (a – h)^2 cm^2. What is the rate at which the area is decreasing due to plaque…arrow_forward
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