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The expenditure and value-added approaches to calculating GDP arrive at the same final number, but they reach that number in different ways. To illustrate, consider the possible effects of the following set of transactions on GDP: 1. Sean pays Better Buy $1,100 for a new high-definition television (HDTV) and its installation. He's attracted by Better Buy's guarantee that he'll be happy with the new HDTV or get his money back. 2. Better Buy pays Firedog $750 to install the HDTV. 3. Firedog buys hardware worth $100 from The Home Station. Compute the contribution to GDP of this set of transactions, using the expenditure approach, i.e., by assuming expenditures of buyers of final goods and services. Assume that The Home Station receives the hardware at no charge and that other costs are zero. Which of the following would be included in the expenditure method of calculating GDP? Check all that apply. O Sean spends $1,100. O Firedog spends $100. O Better Buy spends $750. The total contribution of these transactions to GDP, as measured by the expenditure approach, is

The expenditure and value-added approaches to calculating GDP arrive at the same final number, but they reach that number in different ways. To illustrate, consider the possible effects of the following set of transactions on GDP: 1. Sean pays Better Buy $1,100 for a new high-definition television (HDTV) and its installation. He's attracted by Better Buy's guarantee that he'll be happy with the new HDTV or get his money back. 2. Better Buy pays Firedog $750 to install the HDTV. 3. Firedog buys hardware worth $100 from The Home Station. Compute the contribution to GDP of this set of transactions, using the expenditure approach, i.e., by assuming expenditures of buyers of final goods and services. Assume that The Home Station receives the hardware at no charge and that other costs are zero. Which of the following would be included in the expenditure method of calculating GDP? Check all that apply. O Sean spends $1,100. O Firedog spends $100. O Better Buy spends $750. The total contribution of these transactions to GDP, as measured by the expenditure approach, is

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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The expenditure and value-added approaches to calculating GDP arrive at the same final number, but they reach that number in different ways. To illustrate, consider the possible effects of the following set of transactions on GDP:

The expenditure and value-added approaches to calculating GDP arrive at the same final number, but they reach that number in different ways. To illustrate, consider the possible effects of the following set of transactions on GDP: 1. Sean pays Better Buy $1,100 for a new high-definition television (HDTV) and its installation. He's attracted by Better Buy's guarantee that he'll be happy with the new HDTV or get his money back. 2. Better Buy pays Firedog $750 to install the HDTV. 3. Firedog buys hardware worth $100 from The Home Station. Compute the contribution to GDP of this set of transactions, using the expenditure approach, i.e., by assuming expenditures of buyers of final goods and services. Assume that The Home Station receives the hardware at no charge and that other costs are zero. Which of the following would be included in the expenditure method of calculating GDP? Check all that apply. Sean spends $1,100. Firedog spends $100. Better Buy spends $750. The total contribution of these transactions to GDP, as measured by the expenditure approach, is
Transcribed Image Text:The expenditure and value-added approaches to calculating GDP arrive at the same final number, but they reach that number in different ways. To illustrate, consider the possible effects of the following set of transactions on GDP: 1. Sean pays Better Buy $1,100 for a new high-definition television (HDTV) and its installation. He's attracted by Better Buy's guarantee that he'll be happy with the new HDTV or get his money back. 2. Better Buy pays Firedog $750 to install the HDTV. 3. Firedog buys hardware worth $100 from The Home Station. Compute the contribution to GDP of this set of transactions, using the expenditure approach, i.e., by assuming expenditures of buyers of final goods and services. Assume that The Home Station receives the hardware at no charge and that other costs are zero. Which of the following would be included in the expenditure method of calculating GDP? Check all that apply. Sean spends $1,100. Firedog spends $100. Better Buy spends $750. The total contribution of these transactions to GDP, as measured by the expenditure approach, is
Now use the following table to compute the contribution of these transactions to GDP by summing the values added at each stage of production. Stage of Production Sale Value Cost of Intermediate Goods Resource Cost-Income The Home Station $100 $ Firedog $750 $ $ Better Buy $1,100 $ The contribution to GDP that you found using the expenditure approach corresponds to the sum of the at each stage of production.
Transcribed Image Text:Now use the following table to compute the contribution of these transactions to GDP by summing the values added at each stage of production. Stage of Production Sale Value Cost of Intermediate Goods Resource Cost-Income The Home Station $100 $ Firedog $750 $ $ Better Buy $1,100 $ The contribution to GDP that you found using the expenditure approach corresponds to the sum of the at each stage of production.
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