32. Giving reason explain how should thefollowing be treated in estimatingGross Domestic Product at Market Price ?(i) Fees to a mechanic paid by a firm.(ii) Interest paid by an individual on a car loantaken from a bank.(iii) Expenditure on purchasing a car for use by afirm

GDP at market prices is the end result of resident producer units' production activity. It is…

Answered: 32. Giving reason explain how should…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question 2 (i) Explain the difference between Gross Domestic Product (GDP) and Gross National Income. (ii) Explain the difference between Gross Domestic Product at factor cost (basic prices) and Gross Domestic Product at market prices. (iii)Explain the difference between nominal Gross Domestic Product and real Gross Domestic Product over time and the role of the GDP deflator.
Table 1 shows some data on the prices and quantities for a simple economy that produces the following goods and services. Table 1: Price and quantity for three types of product Product Year 2017 Year 2018 Year 2019 Price Quantity Price Quantity Price Quantity (RM) (RM) (RM) A 1 180 1 200 1.25 200 90 75 90 100 100 120 C 0.6 675 0.5 600 0.5 630 (i) Compute the values of nominal GDP in 2017, 2018 and 2019. Compute the values of real GDP and GDP deflator in 2018 and 2019 (using 2017 as the base year). (ii) Compute the percentage change in the real GDP in 2018 and 2019 from the preceding year. (iii)
6. Limitations of GDP Although GDP is a reasonably good measure of a nation's output, it does not necessarily include all transactions and production for that nation. Which of the following scenarios are either not accounted for or measured inaccurately by either the income or the expenditure methods of calculating GDP for the United States? Check all that apply. The quality of goods available to consumers The loss of enjoyment people incur when scenic land is converted to commercial use Federal government paychecks to soldiers The import and sale of illegal drugs from South America When a U.S. company purchases and imports electronic parts from China to use to produce smartphones within the United States, this purchase increases the component of GDP while also increasing net exports by the same amount. Therefore, the in US GDP. investment purchase of electronic parts from China causes no overall change
The following table shows the national income data for an economy in year 2020. ITEMS Dividends Interest on government loan Undistributed profit Gross interest Subsidies Corporate income taxes interest on consumer loan Indirect taxes Gross Domestic Product at factor cost Depreciation Wages and salaries Rent Corporate income before taxes You are required to calculate: (a) net interest. (b) corporate profit. (c) National Income. (d) Gross National Product at factor cost. Net factor income from abroad. RM (Million) 160 100 125 990 120 180 90 160 4,370 250 1,080 645 710
6. Limitations of GDP Although GDP is a reasonably good measure of a nation's output, it does not necessarily include all transactions and production for that nation. Which of the following scenarios are either not accounted for or measured inaccurately by either the income or the expenditure methods of calculating GDP for the United States? Check all that apply. The quality of goods available to consumers O The loss of enjoyment people incur when scenic land is converted to commercial use The value of babysitting services, when the babysitter is paid in cash and the transaction isn't reported to the government O Federal government paychecks to soldiers When a U.S. company purchases and imports automotive parts from Canada to use to build cars within the United States, this purchase increases the net exports by the same amount. Therefore, the purchase component of GDP while also in US GDP. automotive parts from Canada causes
Question: What is the aggregate of the gross balances of primary income of all resident institutional units knows as?[A] Gross domestic Product[B] Gross national product[C] Gross National income[D] Net national productPlease Don't use chatgpt or other ai tool.
In the calculation of national income, all of these items are added, except _____. a. Imputed rent of owner occupied houses b. Food and other items for self-consumption c. Sale and purchase of bonds and shares d. Own account production of fixed assets
77. What is the problem with using GDP as a measure of societal well-being? (A) GDP does not measure environmental damage. (B) GDP does not measure community and family bonds. (C) GDP does not measure rights and freedoms. (D) All of the above.
Question 3 Participants Cost of Value of Materials Sales Farmer $ 0 24 $ 100 Cone factory 100 250 and ice cream-maker Middleperson 250 400 Vendor 400 500 (i) Calculate the value added at each stage of production (ii) Calculate the contribution to GDP from the good
Which of these items is not a part of the country’s national income? a. Income made by stores that sells consumer goods b. Government transfer payments c. Income made by companies for selling new products d. Rental income made by rental property owners
2. Activities included (and not included) in the calculation ofGDP The gross domestic product (GDP) of the United States is defined as the all in a given period of time. Based on this definition, indicate which of the following transactions will be included in (that is, directly increase) the GDP of the United States in 2020. 2020 GDP Scenario Included Excluded Sofaland, a Swedish furniture company, produces a table at a plant in Virginia on December 5, 2020. It sells the table to a college student on December 24. You chop down a cherry tree on your property in California and make a dining room table in 2020. A similar table sells for $800 in a local furniture store. Zippycar, a U.S. automobile company, produces a convertible at a manufacturing plant in Minneapolis on January 21, 2020. It sells the car at a dealership in San Francisco on February 10, 2020. Athleticus, a U.S. shoe company, produces a pair of sneakers at a plant in Vietnam on March 10, 2020. Athleticus imports the pair…

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32. Giving reason explain how should the following be treated in estimating Gross Domestic Product at Market Price ? (i) Fees to a mechanic paid by a firm. (ii) Interest paid by an individual on a car loan taken from a bank. (iii) Expenditure on purchasing a car for use by a fırm