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For each of the following transactions, determine if it takes place in the market for outputs or the market for inputs. Then, determine the direction of the flow of goods and services and the flow of money between households and businesses. Finally, determine how GDP as measured by the market value of output, spending on output, income received, or wages and profits changes. Labanya purchases a robotic vacuum cleaner on Amazon for $375.

For each of the following transactions, determine if it takes place in the market for outputs or the market for inputs. Then, determine the direction of the flow of goods and services and the flow of money between households and businesses. Finally, determine how GDP as measured by the market value of output, spending on output, income received, or wages and profits changes. Labanya purchases a robotic vacuum cleaner on Amazon for $375.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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For each of the following transactions, determine if it takes place in the market for outputs or the market for inputs. Then, determine the direction of the flow of goods and services and the flow of money between households and businesses. Finally, determine how GDP as measured by the market value of output, spending on output, income received, or wages and profits changes. Labanya purchases a robotic vacuum cleaner on Amazon for $375.
**Title: Understanding Economic Transactions** **Instructions:** 1. For each of the following transactions, determine if it takes place in the market for outputs or the market for inputs. Then, determine the direction of the flow of goods and services and the flow of money between households and businesses. Finally, determine how GDP as measured by the market value of output, spending on output, income received, or wages and profits changes. **Example Transaction:** a. [Individual] purchases a $375.00 robotic vacuum cleaner on Amazon. --- **Explanation:** - *Market Type:* This transaction takes place in the market for outputs, as a good (the robotic vacuum cleaner) is being purchased. - *Flow of Goods and Money:* The robotic vacuum cleaner (a good) flows from the business (Amazon/seller) to the household (buyer). Money flows from the household (buyer) to the business (seller). - *Impact on GDP:* This transaction increases GDP as it reflects spending on output. The market value of the vacuum cleaner, $375.00, contributes to the total GDP. The income received by the seller and any associated profits or wages paid in the production and distribution of the vacuum cleaner will also be included in the GDP calculation. --- This type of analysis helps in understanding how everyday transactions affect economic indicators and contribute to the broader economic picture.
Transcribed Image Text:**Title: Understanding Economic Transactions** **Instructions:** 1. For each of the following transactions, determine if it takes place in the market for outputs or the market for inputs. Then, determine the direction of the flow of goods and services and the flow of money between households and businesses. Finally, determine how GDP as measured by the market value of output, spending on output, income received, or wages and profits changes. **Example Transaction:** a. [Individual] purchases a $375.00 robotic vacuum cleaner on Amazon. --- **Explanation:** - *Market Type:* This transaction takes place in the market for outputs, as a good (the robotic vacuum cleaner) is being purchased. - *Flow of Goods and Money:* The robotic vacuum cleaner (a good) flows from the business (Amazon/seller) to the household (buyer). Money flows from the household (buyer) to the business (seller). - *Impact on GDP:* This transaction increases GDP as it reflects spending on output. The market value of the vacuum cleaner, $375.00, contributes to the total GDP. The income received by the seller and any associated profits or wages paid in the production and distribution of the vacuum cleaner will also be included in the GDP calculation. --- This type of analysis helps in understanding how everyday transactions affect economic indicators and contribute to the broader economic picture.
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