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Describe the role of business inventory change in determining the equilibrium level of GDP and changes in the level of GDP.
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- The table given below reports the value of sales at each stage of production of an economics book.Table 5.1 The Production of an Economics Book Production Stage Sales Value Purchase of Timber $1.25 Processing of Timber into Paper $7.75 Printing $24.50 Retail Sales of Economics Book $38.00 Refer to Table 5.1. What is the contribution to GDP from the production of an economics book? Group of answer choices $71.50 $38 $7.75 $13.50 $24.501. Calculate the values for the blanks in the shaded areas of the table below (identify your responses in a logical fashion in your document): Expenditure Components of GDP by Country, 2018 (billions of US dollars) Denmark Finland Australia Canada India Japan New Zealand UK US Consumption 808.7 996.9 165.9 146.1 1650.6 2763.3 120.0 1870.5 13998.7 Investment Business fixed investment 336.9 385.1 78.8 65.6 842.7 1202.5 49.1 487.3 4260.7 Changes in inventories 0.1 9.4 2.9 3.4 27.4 11.2 0.1 5.8 54.7 Government 275.5 357.1 86.6 62.7 312.1 981.6 38.4 528.3 2904.3 Net Exports Exports Imports 348.5 544.9 197.9 106.8 548.6 917.1 58.2 856.8 2510.2 312.0 581.1 176.4 108.8 657.0 904.4 58.1 907.1 3148.5 GDP Source: UNData, UN Statistics Division, data.un.org, GDP by Type of Expenditure at current prices – US dollars 2. Based on the information in the table and your calculations for Question #1: Do any countries have positive net exports? Which one(s)? Which country has the largest negative net…Consider a simple economy that produces two goods: stickers and donuts. The following table shows the prices and quantities of the goods over a three-year period. Stickers Donuts Price Quantity Price Year (Dollars per sticker) (Number of stickers) (Dollars per donut) Quantity (Number of donuts) 2019 2 215 3 155 2020 st 4 135 3 210 2021 2 150 3 190 Use the information from the preceding table to fill in the following table. Nominal GDP (Dollars) Real GDP (Base year 2019, dollars) GDP Deflator Year 2019 2020 2021 From 2020 to 2021, nominal GDP and real GDP ' The inflation rate in 2021 was Why is real GDP a more accurate measure of an economy's production than nominal GDP? Real GDP does not include the value of intermediate goods and services, but nominal GDP does. Real GDP includes the value of exports, but nominal GDP does not. Real GDP is not influenced by price changes, but nominal GDP is.
- Consumers in a small economy spend $50,000 on goods and services annually. Also annually, investment is $10,000, government spending is $7,000, exports are $400, and imports are $200. What is the value of GDP in this economy? Provide your answer below:Consumption Investment Indicate what components of GDP (if any) each of the following transactions would affect. Check all that apply. 3. Problems and Applications Q1 Transaction Uncle John receives a check from the federal government for unemployment insurance benefits. You pay a hairdresser for a haircut. New York hires workers to plow snow after a snowstorm. Uncle Henry buys a new refrigerator from a domestic manufacturer. Uncle John orders 10 new computers for his finance business. Ford sells a Mustang from its inventory to the Martinez family. Ford manufactures a Focus and adds it to its inventory. You buy a new Toshiba computer. ☐ ☐ ☐ ☐ Government Purchases Net Exports ப ☐ ☐ ☐ ☐ ☐ 000The table below shows the values for several different components of GDP. Composition of Gross Domestic Product Component LA Consumer durables Consumer nondurables Services Business fixed investment Residential fixed investment Inventories Exports Imports Government purchases What is the value of total gross investment? Instructions: Round your answer to 1 decimal place. Value (billions of dollars) $1,292.7 2,615.4 8,038.8 2,805.0 558.5 80.4 billion 2,320.5 2,863.1 3,093.6
- Which of the following will be counted as part of the U.S.'s GDP for a given year? Select one: a. An All-Terrain Vehicle produced by Honda in Timmonsville, South Carolina b. Cleaning service by an illegal immigrant that is not reported to the IRS c. A whopper burger produced by Burger King in Tel Aviv, Israel d. Tools purchased by a professional plumber at Home Depot e. An antique car that is sold at an auctionWhy 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 does not include the value of intermediate goods and services, but nominal GDP does. 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.In 2020, Delorse Greenlee purchased a 1892 painting by Paul Cezanne for $250 million. She also paid a 1 percent commission to the auction house that sold the painting. What was the contribution of these transactions to GDP in the year 2020? Select one: a. $2.5 million b. $252.5 million C. $25 million d. $0
- Real versus nominal GDP Consider a simple economy that produces two goods: stickers and paper plates. The following table shows the prices and quantities of the goods over a three-year period. Year Stickers Paper plates Price Quantity Price Quantity (Dollars per sticker) (Number of stickers) (Dollars per paper plate) (Number of paper plates) 2020 3 260 2 160 2021 4 120 2 220 2022 3 155 2 140 Use the information from the preceding table to fill in the following table. Year Nominal GDP Real GDP GDP Deflator (Dollars) (Base year 2020, dollars) 2020 2021 2022 From 2021 to 2022, nominal GDP DECREASED OR INCREASED , and real GDP INCREASED OR DECREASED. The inflation rate in 2022 was -13% or -.01% or 13% or 87% or 115%. Why is real GDP a more accurate measure of an economy's production than nominal GDP? a. Real GDP is not influenced by price changes, but nominal GDP is.…The participation of women in the U.S. labor force has risen dramatically since 1970. How do you this this rise affected GDP? Now imagine a measure of well-being that includes time spent working in the home and taking leisure. How would the change in this measure of well-being compare to the change in GDP? Can you think of other aspects of well-being that are associated with the rise in women’s labor-force participation? Would it be practical to construct a measure of well-being that includes these aspects?If General Motors builds cars in Germany, is their value counted in Germany's GDP?
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