For each blank place either an “I” if the scenario is an intermediate good, or an “F” if it is a final good. 1) Shampoo is bought and used by a hair stylist in the mall. 2) A family buys some finger paint for their child to use. 3) A person buys a tire to replace to flat one on their car. 4) A hotel chain buys a box of pens. 5) Flour is bought and used to bake a cake to be sold at a bakery. 6) Someone buys a steak to grill at home. 7) An accounting firm buys calculators for its accountants. 8) A person buys shampoo to use at home. 9) Flour is bought and used to bake a cake for a birthday. 10) A student buys a pack of pens to do their homework. 11) A restaurant prepares a steak for its customers. 12) A factory buys tires to place on their cars. 13) An artist buys paints for a painting, with the intention of keeping it. 14) A calculator is bought and used for mathematics homework. 15) An artist buys paints for a landscape painting, with the intention of selling it.
Intermediate vs. Final Goods
For each blank place either an “I” if the scenario is an intermediate good, or an “F” if it is a final good.
1) Shampoo is bought and used by a hair stylist in the mall.
2) A family buys some finger paint for their child to use.
3) A person buys a tire to replace to flat one on their car.
4) A hotel chain buys a box of pens.
5) Flour is bought and used to bake a cake to be sold at a bakery.
6) Someone buys a steak to grill at home.
7) An accounting firm buys calculators for its accountants.
8) A person buys shampoo to use at home.
9) Flour is bought and used to bake a cake for a birthday.
10) A student buys a pack of pens to do their homework.
11) A restaurant prepares a steak for its customers.
12) A factory buys tires to place on their cars.
13) An artist buys paints for a painting, with the intention of keeping it.
14) A calculator is bought and used for mathematics homework.
15) An artist buys paints for a landscape painting, with the intention of selling it.
Analyzing a Table:
The table above gives the values of different expenditures in the United States during 1999. Answer the following questions about the United States.
- What was the value of net exports of goods and services in 1999?
- What was GDP equal to in 1999?
GDP Practice
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Scenario |
Component of GDP affected: C, I, G, X-M, or NC-not counted |
Effect on GDP (increase, decrease, no change) |
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1. A farmer purchases a new tractor. |
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2. Businesses increase their current inventories. |
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3. You spend $7 to attend a movie. |
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4. Worried about consumer confidence, Ford purchases less sheet metal for cars. |
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5. A retired man cashes his social security check from the government. |
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6. A French company purchases a one- year membership to PartyPeople.com, a U.S.-based company |
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7. A person pays $450 a month to rent an apartment. |
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8. Worried about a recession, people begin saving more money. |
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9. The U.S. government hires 10 Chinese-language experts from China to train U.S. workers. |
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10. Government closes school for the month of March. |
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