Macroeconomics
13th Edition
ISBN: 9781337617390
Author: Roger A. Arnold
Publisher: Cengage Learning
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Question
Chapter 7, Problem 8QP
To determine
Explain the sum of
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What is the effect that changes in business taxes, personal income, and transfer payments have on a country’s gross domestic product (GDP).
The table below includes data for a one-year period required to calculate GDP from the income side for a teeny-tiny economy.
Gross investment expenditure
Wages and salaries
Consumption expenditure
Interest and investment income
Business profits
Depreciation
Indirect taxes less subsidies
Net exports
TABLE 20-4
$402.00
$1741.00
$1302.40
$99.40
$70.40
$199.20
$175.20
$94.00
Refer to Table 20-4. What is the value of GDP, as calculated from the income side?
$2010.00
$1982.60
$1986.00
$2584.40
$2285.20
Paolo and Sharon Zambetti live in Swarthmore, PA. Their son, Van, is an artist living in New York City.
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
C
I
G
X
M
Paolo buys a bottle of Italian wine.
Sharon gets a haircut.
Van paints a landscape and sells it to an art collector in Japan.
The Zambettis build an addition on their house.
The Federal Aviation Administration expands the runways at Philadelphia International Airport, which is just a few miles from Paolo and Sharon's house.
Chapter 7 Solutions
Macroeconomics
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. 1QPCh. 7 - Prob. 2QP
Ch. 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. 12QPCh. 7 - Prob. 13QPCh. 7 - Prob. 14QPCh. 7 - Prob. 1WNGCh. 7 - Prob. 2WNGCh. 7 - Prob. 3WNGCh. 7 - Prob. 4WNGCh. 7 - Prob. 5WNGCh. 7 - Prob. 6WNGCh. 7 - Prob. 7WNGCh. 7 - Prob. 8WNGCh. 7 - Prob. 9WNGCh. 7 - Prob. 10WNGCh. 7 - Prob. 11WNG
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Similar questions
- Why does gross domestic product measure the final value of goods and services produced in a country over a given period of time?arrow_forwardWhat is the change in GDP according to the *****income**** approach? How do the inputs that make up Net Domestic Income (wages, interest, and profits) change? I noticed that using the expenditure approach the GDP DECREASED by 800 dollars. My income approach is not working out.arrow_forwardGiven the following: consumption = 430, investment = 300, government expenditure = 150 and net export = -70, what is the economy’s GDP ?arrow_forward
- Briefly discuss five reasons why a rise in real Gross Domestic Product within a country over time does not necessarily mean that living standards have improved.arrow_forwardLarry and Megan Smith live in Swarthmore, PA. Megan's father, Raphael, lives in Sweden. 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 Larry buys a sweater made in Guatemala. The state of Pennsylvania repaves highway PA 320, which goes through the center of Swarthmore. Megan's father in Sweden orders a bottle of Vermont maple syrup from the producer's website. Megan gets a new video camera made in the United States. Larry's employer upgrades all of its computer systems using U.S.-made parts.arrow_forward
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