Question 2 a) Give the definition of GDP and explain what items are not included in its calculation? b) How is GDP calculated using the expenditure approach? c) How is GDP calculated using the income approach? d) Explain the problem of "double-counting" and how it can be avoided in calculating GDP
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- Question 2: Fill in the blanks. The three different approaches to measuring the GDP are the expenditure approach, the approach, and the approach. The expenditure approach aggregates the spending by the four sectors of the economy: (a) the household sector, (b) the sector, (c) the sector, and (d) the foreign sector, to yield the total GDP. The largest spending in Canada’s aggregate GDP comes from the sector. When using the income approach, the first step is to calculate the total national income by adding employee compensation, proprietor’s income, , net interest, and rental income. There are six categories of economic exchanges that are omitted from GDP calculations. One such category is government transfer payments (like unemployment insurance payment), because it represents transfers of income without new production. Another category is , because because they are unpaid and not…Question 7 The expenditures approach to GDP equals a) Consumption + Gross Investment + Government Purchases + Net Exports. b) Employee Compensation + Profit + Net Property Income + Indirect Business Taxes + Depreciation - Income Earned Abroad. c) Consumption + Net Investment (Gross Investment-Depreciation) + Government Purchases + Net Exports. d) Employee Compensation - Profit - Net Property Income - Indirect Business Taxes-Depreciation - Income Earned Abroad.3. Categories of expenditures Dmitri and Frances Doherty live in Conshohocken, PA. Their son, Jake, owns his own plumbing business. For each of the following transactions that occur in their lives, identify whether it is included in the calculation of U.S. GDP as part of consumption (C), investment (1), government purchases (G), exports (X), or imports (M). Check all that apply. Transaction Dmitri's employer assigns him to provide consulting services to an Australian firm that's opening a manufacturing facility in China. The Pennsylvania Department of Transportation, a state administration, fixes potholes along PA highway: 23, which feeds into the center of Conshohocken, Frances gets a new video camera made in the United States. Dmitri buys a sweater made in Guatemala. Jake buys a new set of tools to use in his plumbing business. с 00 I O O G O X 0 M O O 0 000 00 000 000
- Determine if the following would be included (I) or excluded (E) from the calculation of GDP. (d) An increase in business inventories _______ (e) The income of a tax accountant working for a business _______ (f) Income received from interest on a corporate bond ________ (g) Business expenditures on pollution control equipment ______ (h) Dr. Jung grows tomatoes in his backyard for home consumption _______2. Activities included (and not included) in the calculation ofGDP The gross domestic product (GDP) of the United States is defined as the all in a given period of time. Based on this definition, indicate which of the following transactions will be included in (that is, directly increase) the GDP of the United States in 2018. 2018 GDP Scenario Included Excluded Calculo, a U.S. electronics company, produces a calculator at a plant in Indonesia on March 17, 2018. Calculo imports the calculator into the United States on May 21, 2018. Treetopplers, a U.S. lumber company, produces wood at a plant in Oregon on September 13, 2018. It sells the wood to Buildit and Partners, a developer, for use in the production of a new house that will be built in the United States in 2018. (Note: Focus exclusively on whether production of the wood increases GDP directly, and ignore the effect of production of the new house on GDP.) Zippycar, a U.S. automobile company, produces a convertible at a…1. What is the distinction between Nominal GDP and Real GDP? Which is more important in terms of satisfying humans wants? Why? 2. Use list to compute GDP from the Expenditures approach. Personal Consumption expenditures $600 Transfer payments $15 Consumption of fixed capital $20 Interest $11 Exports $15 Government purchases $85 Compensation of employees $225 Imports $18 Net private domestic investment $65
- 3. Categories of expenditures Shen and Valerie Ferrari live in Swarthmore, PA. Valerie's father, Antonio, lives in Sweden. For each of the following transactions that occur in their lives, identify whether it is included in the calculation of U.S. GDP as part of consumption (C), investment (I), government purchases (G), exports (X), or imports (M). Check all that apply. Transaction Shen's employer upgrades all of its computer systems using U.S.-made parts. Valerie gets a new video camera made in the United States. The state of Pennsylvania repaves highway PA 320, which goes through the center of Swarthmore. Valerie's father in Sweden orders a bottle of Vermont maple syrup from the producer's website. Shen buys a bottle of Italian wine. OOOoo 0 I 00000 G 00 000 X 00000 M OC 0 0 0 0Table 1: Items for GDP Calculation Item Billions of Dollars 250 Government expenditure on goods and services Compensation of employees 1,675 325 Gross private domestic investment Rental income 20 1425 Personal consumption expenditures Net interest 40 Net exports of goods and services 100 Indirect business taxes and depreciation 300 1. The table 1 above shows some (but not all) national income accounting data for a hypothetical country. According to these data, the value of GDP is billion. a) £2100 b) £2050 c) £1850 d) £2000 2. When a worker quits a job to look for a better job, a) frictional unemployment increases. b) structural unemployment decreases. c) structural and cyclical unemployment increase. cyclical unemployment increases. d) Student ID number: X W 0 Labor (billions of hours per year) 3. Based on the above figure, the country of Kemper is on its aggregate production function at point W. The government of Kemper passes a law that makes 4 years of college mandatory for all…Identify the components of the GDP formula (expenditure approach). Explain how the current COVID-19 pandemic will affect said components and therefore affect GDP (arc the components increasing/decreasing?). Lastly, why are these components affected? Example: Think about what is happening to households and firms and how it changes their relationship for cach other. What is the government doing and do you think it will be sufficient?
- QUESTION 2 The table below gives the values of different expenditures in the United States during 1999. Answer the following questions about the United States a) Define the concept of Gross Domestic Product (GDP) b) Calculate the value of net exports of goods and services in 1999? c) Calculate (nominal) GDP equal to in 1999? d) What was the (nominal) value of total production equal to in 1999? Note: 1. No need hand writing 2. Please clear answer no whois one a,b,c,dPlease tell me what are the correct awnser for the following questions 11)12) they are multiple choice and unrelated questions to each other please tell me only which ones are correct Thank you Please see the attached picture has the graph which needs to be analysed to awnser question 12. 11 The UK GDP per capita measures: Select one or more: a. the total output of London’s economy. b. the average disposable income of a UK national. c. the total output of the UK nationals, divided by the number of the nationals. d. the total output of the UK’s economy, divided by the country’s population. 12 Look at this graph of real wage index in England between 1260 and 1800. Consider also that, in the bubonic plague of 1348 and 1351, between one quarter and one third of Europe’s population died. (SEE ATTACHED PICTURE) Select one or more: a. According to the Malthusian model, the fall in the population due to the bubonic plague would have led to an increase in the average…