PROBLEMS AND APPLICATIONS 1. What components of GDP (if any) would each of the following transactions affect? Explain. a. Uncle Henry buys a new refrigerator from a domestic manufacturer. fro th yo c. D b. Aunt Jane buys a new house from a local builder. c. The Jackson family buys an old Victorian house from the Walker family. d. You pay a hairdresser for a haircut. e. Ford sells a Mustang from its inventory to the Martinez family. f. Ford manufactures a Focus and sells it to Avis, the car rental company. g. California hires workers to repave Highway 101. h. The federal government sends your grandmother a Social Security check. i. Your parents buy a bottle of French wine. j. Honda expands its factory in Ohio. 20 6. Cons bars. price and t 5 bar: a. W ye b. W c. W d. W fro e. W de Fill in the blanks: 2. f. In Real GDP Nominal GDP GDP Deflator ar (base year (in 2000 (in current pa Year dollars) dollars) 2000) 7. Cons 1970 3,000 1,200 1980 5,000 60 Year 1990 6,000 100 2014 2000 8,000 1994 2010 15,000 200 a. W be 2020 300 10,000 20,000 50,000 2030 10 The government purchases component of GDP does not include spending on transfer payments such as Social Security. Thinking about the definition of GDP, explain why transfer payments are excluded. 3. b. W be C. W pr d. W As the chapter states, GDP does not include the value of used goods that are resold. Why would including such transactions make GDP a less informative mea- 4. pr e. W sure of economic well-being? 19 f. W Below are some data from the land of milk and honey. 5. lo TPTP Price Quantity Price Quantity of Honey 8. Revis of Honey Year of Milk of Milk by th. 100 quarts $1 $2 50 quarts 2016 a nev releas 100 2017 200 2018 100 200 4 nomi a. Compute nominal GDP, real GDP, and the GDP deflator for each year, using 2016 as the base year. b. Compute the percentage change in nominal GDP, real GDP, and the GDP deflator in 2017 and 2018 nomi 9. A far: $100. sells Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, o 494 PART VIII THE DATA OF MACROECONOMICS
PROBLEMS AND APPLICATIONS 1. What components of GDP (if any) would each of the following transactions affect? Explain. a. Uncle Henry buys a new refrigerator from a domestic manufacturer. fro th yo c. D b. Aunt Jane buys a new house from a local builder. c. The Jackson family buys an old Victorian house from the Walker family. d. You pay a hairdresser for a haircut. e. Ford sells a Mustang from its inventory to the Martinez family. f. Ford manufactures a Focus and sells it to Avis, the car rental company. g. California hires workers to repave Highway 101. h. The federal government sends your grandmother a Social Security check. i. Your parents buy a bottle of French wine. j. Honda expands its factory in Ohio. 20 6. Cons bars. price and t 5 bar: a. W ye b. W c. W d. W fro e. W de Fill in the blanks: 2. f. In Real GDP Nominal GDP GDP Deflator ar (base year (in 2000 (in current pa Year dollars) dollars) 2000) 7. Cons 1970 3,000 1,200 1980 5,000 60 Year 1990 6,000 100 2014 2000 8,000 1994 2010 15,000 200 a. W be 2020 300 10,000 20,000 50,000 2030 10 The government purchases component of GDP does not include spending on transfer payments such as Social Security. Thinking about the definition of GDP, explain why transfer payments are excluded. 3. b. W be C. W pr d. W As the chapter states, GDP does not include the value of used goods that are resold. Why would including such transactions make GDP a less informative mea- 4. pr e. W sure of economic well-being? 19 f. W Below are some data from the land of milk and honey. 5. lo TPTP Price Quantity Price Quantity of Honey 8. Revis of Honey Year of Milk of Milk by th. 100 quarts $1 $2 50 quarts 2016 a nev releas 100 2017 200 2018 100 200 4 nomi a. Compute nominal GDP, real GDP, and the GDP deflator for each year, using 2016 as the base year. b. Compute the percentage change in nominal GDP, real GDP, and the GDP deflator in 2017 and 2018 nomi 9. A far: $100. sells Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, o 494 PART VIII THE DATA OF MACROECONOMICS
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Transcribed Image Text:PROBLEMS AND APPLICATIONS
1. What components of GDP (if any) would each of the
following transactions affect? Explain.
a. Uncle Henry buys a new refrigerator from a
domestic manufacturer.
fro
th
yo
c. D
b. Aunt Jane buys a new house from a local builder.
c. The Jackson family buys an old Victorian house
from the Walker family.
d. You pay a hairdresser for a haircut.
e. Ford sells a Mustang from its inventory to the
Martinez family.
f. Ford manufactures a Focus and sells it to Avis, the
car rental company.
g. California hires workers to repave Highway 101.
h. The federal government sends your grandmother
a Social Security check.
i. Your parents buy a bottle of French wine.
j. Honda expands its factory in Ohio.
20
6. Cons
bars.
price
and t
5 bar:
a. W
ye
b. W
c. W
d. W
fro
e. W
de
Fill in the blanks:
2.
f. In
Real GDP
Nominal GDP
GDP Deflator
ar
(base year
(in 2000
(in current
pa
Year
dollars)
dollars)
2000)
7. Cons
1970
3,000
1,200
1980
5,000
60
Year
1990
6,000
100
2014
2000
8,000
1994
2010
15,000
200
a. W
be
2020
300
10,000
20,000
50,000
2030
10
The government purchases component of GDP does
not include spending on transfer payments such as
Social Security. Thinking about the definition of GDP,
explain why transfer payments are excluded.
3.
b. W
be
C. W
pr
d. W
As the chapter states, GDP does not include the value
of used goods that are resold. Why would including
such transactions make GDP a less informative mea-
4.
pr
e. W
sure of economic well-being?
19
f. W
Below are some data from the land of milk and honey.
5.
lo
TPTP
Price
Quantity
Price
Quantity
of Honey
8. Revis
of Honey
Year
of Milk
of Milk
by th.
100 quarts
$1
$2
50 quarts
2016
a nev
releas
100
2017
200
2018
100
200
4
nomi
a. Compute nominal GDP, real GDP, and the GDP
deflator for each year, using 2016 as the base year.
b. Compute the percentage change in nominal GDP,
real GDP, and the GDP deflator in 2017 and 2018
nomi
9. A far:
$100.
sells
Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, o
494
PART VIII THE DATA OF MACROECONOMICS
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education