4. Calculate nominal GDP three ways for the hypothetical economy below. Transaction Value of Final Use Income Value Transaction Expenditure Created Added (Revenue - Cost) Mine to $4,000 Smelter Smelter to $6,000 Battery Fabricator $9,000 Battery Fabricator to Tesla Tesla to You $30,000 Total Why is the total value of transactions not of interest?

4. Calculate nominal GDP three ways for the hypothetical economy below. Transaction Value of Final Use Income Value Transaction Expenditure Created Added (Revenue - Cost) Mine to $4,000 Smelter Smelter to $6,000 Battery Fabricator $9,000 Battery Fabricator to Tesla Tesla to You $30,000 Total Why is the total value of transactions not of interest?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Jse the relevant information below: Inventory investment. $50 billion 120 billion Fixed investment Consumer durables 420 billion 275 billion Consumer nondurables Interest 140 billion Indirect business taxes 45 billion Government wages and salaries 300 billion Government purchases of goods and 110 billion services Imports 80 billion Exports 40 billion Consumer semi-durables 185 billion Profits 320 billion Consumer services 600 billion 1. Calculate Consumption, Investment, Government spending 2. Explain the expenditure method of calculating the GDP. How this method is different from the income method of calculating the GDP? 3. Use suitable method to calculate GDP and show your work.
6) The following table describes the economic activities of a hypothetical economy in a given year. Calculate the value-added at each step of the economic activities and its contribution to GDP. Item Seller Buyer Price ($) Value added ($) Kilogram of Lemons Famer Factory 6. Liter of lemon juice Factory Restaurant 10 Liter of lemon juice used as salad dressing Restaurant Consumers 16
5. Real versus nominal GDP Consider a simple economy that produces two goods: cupcakes and erasers. The following table shows the prices and quantities of the goods over a three-year period. Cupcakes Erasers Price Quantity Price Quantity Year (Dollars per cupcake) (Number of cupcakes) (Dollars per eraser) (Number of erasers) 2015 1 110 1 180 2016 2 140 4 210 2017 4 100 4 190 Use the information from the preceding table to fill in the following table. Nominal GDP Real GDP Year (Dollars) (Base year 2015, dollars) GDP Deflator 2015 2016 2017 From 2016 to 2017, nominal GDP and real GDP
5. Real versus nominal GDP Consider a simple economy that produces two goods: cupcakes and erasers. The following table shows the prices and quantities of the goods over a three-year period. Year 2018 2019 2020 Cupcakes Year 2018 2019 2020 Price (Dollars per cupcake) 1 2 4 Quantity (Number of cupcakes) 120 130 130 Price (Dollars per eraser) 1 Erasers 4 4 Use the information from the preceding table to fill in the following table. Nominal GDP Real GDP (Dollars) (Base year 2018, dollars) GDP Deflator and real GDP Quantity (Number of erasers) 195 From 2019 to 2020, nominal GDP The inflation rate in 2020 was Why is real GDP a more accurate measure of an economy's production than nominal GDP? ● Real GDP measures the value of the goods and services an economy produces, but nominal GDP measures the value of the goods and services an economy consumes. 195 145 ● Real GDP is not influenced by price changes, but nominal GDP is. Real GDP includes the value of exports, but nominal GDP does not.
Draw a diagram showing circular flow of national income. Explain it in detail Differentiate between GNP/GNI versus GDP and Nominal GDP Versus Real GDP Explain National Income Accounting Identity, Expenditure Approach, Production Approach and Income Approach . How are National Income Accounts measured in Pakistan?
GDP 1. Calculate the values for the blanks in the shaded areas of the table below: Expenditure Components of GDP by Country, 2020 (83Son of current US dollars) Australia Canada Denmark Finland Japan India 1617 137.9 873 65.9 C E FOOD 80.0 65.3 16 0.5 L M N 195.4 97.G 1725 96.7 Household consumption Government expenditure Investments Gross fixed Investments Changes in inventories Net Exports Exports Imports A: ÄÜÄ÷ B: C: D: E: F: G: H: I: J: 746.5 K: L: 297.2 A 316.9 4.3 3152 254.7 943.7 371.8 B 377.7 (147) K 476.0 509.8 M: N: 0: P: 1,591.7 Q: R: 292.1 722.0 97.0 4973 $11.3 કીડી || T: 2.700.7 Y: 1,066.4 1,279.5 106 785.4 786.2 New Zealand UK 122.0 43.7 G 47.3 (p.s) P 46A GDP S U W Y Source: GOP by Type of Expenditure at current prices-US dollars, Retrieved 7/27/2022. National Accounts Estimates of Main Aggregates United Nations feste Division 472 Z: ZZ: 1,683.7 2. Based on the information in the table and your calculations for Question #1: Do any countries have positive net exports?…
The investment component of gross domestic product (GDP) can be broken down into two main categories fixed investment and business inventories Explain what is included in each category. Edit View Insert Format Tools Table 12pt v Paragraph w BIUA Background color
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 costs of overfishing and other overly intensive uses of resources O Federal government paychecks to soldiers The value of babysitting services, when the babysitter is paid in cash and the transaction isn't reported to the government The leisure time enjoyed by households When a U.S. company purchases and imports wood from Brazil to use to build new houses within the United States, this purchase increases the component of GDP while also net exports by the same amount. Therefore, the purchase of wood in US GDP. from Brazil causes
3. 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 The value produced when you wash your own car at home O Federal government paychecks to soldiers 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 net exports by the same amount. Therefore, the purchase of electronic parts from China causes in US GDP.
4. Calculate the Nominal GDP, Real GDP using 2019 as the base year, and the GDP Deflator. Year Quantity of Milk 100 Price of Honey $4 $4 Price of Milk Quantity of Honey $2 $4 2017 200 2018 100 210 2019 $4 120 $6 220
GDP: Measuring a Nation's Income Why does Total Income-Total Expenditure? Which component of GDP is the largest? Which component includes Why are transfer payments are household purchases of new housing? excluded from GDP? Q of Rice P of Rice GDP Calculation. SHOW ALL YOUR WORK. P of Q of Wheat Wheat Q of Corn P of Corn 1998 100 $5 $6 50 $10 1999 200 70 $10 $9 2000 300 $7 60 100 90 $2 $3 $3 80 Calculate Nominal GDP 1998: 1999: 2000: If Total Spending (Nominal GDP) rises from one year to the next, what are the 2 potential reasons? 2. Calculate Real GDP (Base year 1998) 1998: 1999: 2000: What does real GDP measure by holding the price level constant? Calculate the GDP Deflator 1998: 1999 2000: What is happening to the Price Level in this economy?_ Calculate the Growth Rate of the GDP Deflator 1998-1999: 1999-2000: Calculate the Growth Rate of Output (Percentage change in Real GDP). 1998-1999: 1999-2000: What is a recession?
5. Real versus nominal GDP Consider a simple economy that produces two goods: cupcakes and envelopes. The following table shows the prices and quantities of the goods over a three-year period. Cupcakes Envelopes Price Quantity Price Quantity Year (Dollars per cupcake) (Number of cupcakes) (Dollars per envelope) (Number of envelopes) 2017 1 110 185 2018 155 200 2019 3 110 165 Use the information from the preceding table to fill in the folowing table. Nominal GDP Real GDP (Dollars) (Base year 2017, dollars) GDP Deflator Year 2017 2018 2019 From 2018 to 2019, nominal GDP and real GDP The inflation rate in 2019 was Why is real GDP a more accurate measure of an economy's production than nominal GDP? Real GDP is not influenced by price changes, but nominal GDP is. Real GDP measures the value of the goods and services an economy produces, but nominal GDP measures the value of the goods and services an economy consumes. O Real GDP includes the value of exports, but nominal GDP does not.