Hint: Add the amount of money spent by buyers of final goods and services. Which of the following would be included in the expenditure method of calculating GDP? Check all that apply. JoAnn's Catering spends $200. O Carlos spends $1,100. Awesome Foods Market spends $950. The total contribution to GDP, measured by the expenditure method, is
Hint: Add the amount of money spent by buyers of final goods and services. Which of the following would be included in the expenditure method of calculating GDP? Check all that apply. JoAnn's Catering spends $200. O Carlos spends $1,100. Awesome Foods Market spends $950. The total contribution to GDP, measured by the expenditure method, is
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Hint: Add the amount of money spent by buyers of final goods and services.
Which of the following would be included in the expenditure method of calculating GDP? Check all that apply.
JOAnn's Catering spends $200.
Carlos spends $1,100.
Awesome Foods Market spends $950.
The total contribution to GDP, measured by the expenditure method, is
Transcribed Image Text:The expenditure and resource cost-income approaches to calculating GDP arrive at the same final number, but they calculate that number in differen
ways. To illustrate, consider the possible effects of the following transactions on GDP:
1. Carlos pays Awesome Foods Market $1,100 to cater his daughter's engagement party. He's attracted by Awesome Foods Market's
guarantee that he'll be happy with the catering, or he'll get his money back.
2. Awesome Foods Market pays JoAnn's Catering $950 to cater the party.
3. JoAnn's Catering buys plasticware worth $200 from Kostko.
Compute contributions to GDP, using the expenditure approach. Assume that Kostko receives the plasticware at no charge and that other costs are
zero.
Expert Solution
Step 1
GDP is the total final value of goods and services produced in a country during a particular period. The formula for calculating gdp in expenditure method is consumption + expenditure + investment + net exports (exports-imports).
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