Which of the following are included in GDP calculations? a. Cleaning services performed by Molly Maid Corporation b. Lawn-mowing services performed by a neighborhood child c. Drugs sold illegally on a local street comer d. Prescription drugs manufactured in the United States and sold at a local pharmacy e. A rug woven by hand in Turkey f. Air pollution that diminishes the quality of the air you breathe g. Toxic-waste cleanup performed by a local company h. Car parts manufactured in the United States for a car assembled in Mexico i. A purchase of 1,000 shares of IBM stock j. Monthly Social Security payments received by a retiree

Question

Want to see more full solutions like this?

Answer 1

Textbook Question

Chapter 11, Problem 2P

Which of the following are included in GDP calculations?

a. Cleaning services performed by Molly Maid Corporation

b. Lawn-mowing services performed by a neighborhood child

c. Drugs sold illegally on a local street comer

d. Prescription drugs manufactured in the United States and sold at a local pharmacy

e. A rug woven by hand in Turkey

f. Air pollution that diminishes the quality of the air you breathe

g. Toxic-waste cleanup performed by a local company

h. Car parts manufactured in the United States for a car assembled in Mexico

i. A purchase of 1,000 shares of IBM stock

j. Monthly Social Security payments received by a retiree

Expert Solution

To determine

(a)

To explain:

Whether cleaning services can be included in the gross domestic product.

Answer to Problem 2P

Yes, the services by MM Corporation will be included in gross domestic product.

Explanation of Solution

The services by the MM Corporation is included in the gross domestic product because it has a significant effect in the country's economy.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Expert Solution

To determine

(b)

To explain:

Whetherlawn-mowing services performed by a child of neighborhood can be included in the gross domestic product.

Answer to Problem 2P

No, lawn-mowing services performed by a child of neighborhood is not included in gross domestic product.

Explanation of Solution

The lawn-mowing services performed by child in neighborhood are not included in the gross domestic product because it does not have a significant effect on the country's economy. It does not account for any flow in the national income. Therefore, it will not be included in gross domestic product.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Expert Solution

To determine

(c)

To explain:

Whether if drugs sold illegally on a local street corner can be included in gross domestic product.

Answer to Problem 2P

No, drugs sold illegally on a local street corner are not included in gross domestic product.

Explanation of Solution

The drugs sold illegally on a local street are not included in the gross domestic product because it is illegal and GDP does not count products and services that are producedillegally.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Expert Solution

To determine

(d)

To explain:

Whether the prescribed drugs manufactured at the United States and sold at a local pharmacy can be included in the Gross Domestic Product.

Answer to Problem 2P

Yes, the prescribed drugs manufactured in the Unites States and sold at a local pharmacy are included in gross domestic product.

Explanation of Solution

The prescribed drugs manufactured inthe United States and sold at a local pharmacy are included in the gross domestic product. These drugs areproduced legally within the country, thus these drugs as a final product contribute to gross domestic product.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Expert Solution

To determine

(e)

To explain:

Whether a hand-woven rug made in Turkey can be included in Gross Domestic Product.

Answer to Problem 2P

No, a hand-woven rug in Turkey cannot be included in Gross Domestic Product.

Explanation of Solution

The hand woven rug can be included in the gross domestic product because it has a significant effect on the country's economy.However, this hand woven rug was made in Turkey, this means it was produced outside the border of the country. Hence, this cannot be included in the GDP.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Expert Solution

To determine

(f)

To explain:

Whether air pollution can be included in the gross domestic product.

Answer to Problem 2P

No, air pollution that diminishes the quality of air is not included in the gross domestic product.

Explanation of Solution

Air pollution that diminishes the quality of air is not included in the gross domestic product as it does not add any value to the national income. It is altogether a different concept of environment pollution.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Expert Solution

To determine

(g)

To explain:

Whether the toxic waste cleanup performed by a local company is included in the Gross Domestic Product.

Answer to Problem 2P

Yes, the toxic waste cleanup performed by a local company is included in the Gross Domestic

Product.

Explanation of Solution

The toxic waste cleanup performed by a local company is included in the gross domestic productas it provides with a service, which generates income for the economy; thus, it will be included in the Gross Domestic Product.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Expert Solution

To determine

(h)

To explain:

Whether the car parts manufactured in the United States for a car assembled in Mexico are included in Gross Domestic Product.

Answer to Problem 2P

Yes, the car parts manufactured in the United States for a car assembled in Mexico can be included in gross domestic product.

Explanation of Solution

The car parts manufactured in the United States for a car assembled in Mexico are included in the gross domestic product because it has a significant effect in the country's economy. It generates income through the assembly units that are present within the country. The car parts manufacturer are providing employment, generating revenue through the final product.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Expert Solution

To determine

(i)

To explain:

Whether the purchase of shares of 1,000 IBM stock is included in gross domestic product.

Answer to Problem 2P

No, the purchase of 1,000 IBM stock is not included in the gross domestic product.

Explanation of Solution

The purchase of 1,000 IBM stock is not included in the gross domestic product because it does not have any significant effect on the country's economy as only the owner of stock is changing.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Expert Solution

To determine

(j)

To explain:

Whether the monthly social security payments received by a retiree can be included in the gross domestic product.

Answer to Problem 2P

No, the monthly social security payment received by a retiree is not included in the gross domestic product.

Explanation of Solution

The monthly social security payment received by a retiree is not included in the gross domestic product because it does not have a significant effect in the country's economy and it will also lead to double counting.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

If interest rate parity holds between two countries, then it must be true that: Question 3 options: The interest rates between the two countries are equal. The current forward rate is an unbiased predictor of the future exchange rate. The interest rate differential between the two countries is equal to the percentage difference between the forward exchange rate and the spot exchange rate. Significant covered interest arbitrage opportunities exist between the two currencies. The exchange rate adjusts to keep purchasing power constant across the two currencies.

Suppose the indirect exchange rate for the Canadian dollar is 0.93. Based on this, you know you can buy: Question 2 options: $1 U.S. for $1.93 Canadian. $1 U.S. for $1.08 Canadian. $1 U.S. for $0.93 Canadian. $1.93 U.S. for $1 Canadian. $1.08 U.S. for $1 Canadian.

Answer 2

Textbook Question

Chapter 11, Problem 2P

Which of the following are included in GDP calculations?

a. Cleaning services performed by Molly Maid Corporation

b. Lawn-mowing services performed by a neighborhood child

c. Drugs sold illegally on a local street comer

d. Prescription drugs manufactured in the United States and sold at a local pharmacy

e. A rug woven by hand in Turkey

f. Air pollution that diminishes the quality of the air you breathe

g. Toxic-waste cleanup performed by a local company

h. Car parts manufactured in the United States for a car assembled in Mexico

i. A purchase of 1,000 shares of IBM stock

j. Monthly Social Security payments received by a retiree

Expert Solution

To determine

(a)

To explain:

Whether cleaning services can be included in the gross domestic product.

Answer to Problem 2P

Yes, the services by MM Corporation will be included in gross domestic product.

Explanation of Solution

The services by the MM Corporation is included in the gross domestic product because it has a significant effect in the country's economy.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Expert Solution

To determine

(b)

To explain:

Whetherlawn-mowing services performed by a child of neighborhood can be included in the gross domestic product.

Answer to Problem 2P

No, lawn-mowing services performed by a child of neighborhood is not included in gross domestic product.

Explanation of Solution

The lawn-mowing services performed by child in neighborhood are not included in the gross domestic product because it does not have a significant effect on the country's economy. It does not account for any flow in the national income. Therefore, it will not be included in gross domestic product.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Expert Solution

To determine

(c)

To explain:

Whether if drugs sold illegally on a local street corner can be included in gross domestic product.

Answer to Problem 2P

No, drugs sold illegally on a local street corner are not included in gross domestic product.

Explanation of Solution

The drugs sold illegally on a local street are not included in the gross domestic product because it is illegal and GDP does not count products and services that are producedillegally.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Expert Solution

To determine

(d)

To explain:

Whether the prescribed drugs manufactured at the United States and sold at a local pharmacy can be included in the Gross Domestic Product.

Answer to Problem 2P

Yes, the prescribed drugs manufactured in the Unites States and sold at a local pharmacy are included in gross domestic product.

Explanation of Solution

The prescribed drugs manufactured inthe United States and sold at a local pharmacy are included in the gross domestic product. These drugs areproduced legally within the country, thus these drugs as a final product contribute to gross domestic product.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Expert Solution

To determine

(e)

To explain:

Whether a hand-woven rug made in Turkey can be included in Gross Domestic Product.

Answer to Problem 2P

No, a hand-woven rug in Turkey cannot be included in Gross Domestic Product.

Explanation of Solution

The hand woven rug can be included in the gross domestic product because it has a significant effect on the country's economy.However, this hand woven rug was made in Turkey, this means it was produced outside the border of the country. Hence, this cannot be included in the GDP.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Expert Solution

To determine

(f)

To explain:

Whether air pollution can be included in the gross domestic product.

Answer to Problem 2P

No, air pollution that diminishes the quality of air is not included in the gross domestic product.

Explanation of Solution

Air pollution that diminishes the quality of air is not included in the gross domestic product as it does not add any value to the national income. It is altogether a different concept of environment pollution.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Expert Solution

To determine

(g)

To explain:

Whether the toxic waste cleanup performed by a local company is included in the Gross Domestic Product.

Answer to Problem 2P

Yes, the toxic waste cleanup performed by a local company is included in the Gross Domestic

Product.

Explanation of Solution

The toxic waste cleanup performed by a local company is included in the gross domestic productas it provides with a service, which generates income for the economy; thus, it will be included in the Gross Domestic Product.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Expert Solution

To determine

(h)

To explain:

Whether the car parts manufactured in the United States for a car assembled in Mexico are included in Gross Domestic Product.

Answer to Problem 2P

Yes, the car parts manufactured in the United States for a car assembled in Mexico can be included in gross domestic product.

Explanation of Solution

The car parts manufactured in the United States for a car assembled in Mexico are included in the gross domestic product because it has a significant effect in the country's economy. It generates income through the assembly units that are present within the country. The car parts manufacturer are providing employment, generating revenue through the final product.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Expert Solution

To determine

(i)

To explain:

Whether the purchase of shares of 1,000 IBM stock is included in gross domestic product.

Answer to Problem 2P

No, the purchase of 1,000 IBM stock is not included in the gross domestic product.

Explanation of Solution

The purchase of 1,000 IBM stock is not included in the gross domestic product because it does not have any significant effect on the country's economy as only the owner of stock is changing.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Expert Solution

To determine

(j)

To explain:

Whether the monthly social security payments received by a retiree can be included in the gross domestic product.

Answer to Problem 2P

No, the monthly social security payment received by a retiree is not included in the gross domestic product.

Explanation of Solution

The monthly social security payment received by a retiree is not included in the gross domestic product because it does not have a significant effect in the country's economy and it will also lead to double counting.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Textbook Question

Chapter 11, Problem 2P

Which of the following are included in GDP calculations?

a. Cleaning services performed by Molly Maid Corporation

b. Lawn-mowing services performed by a neighborhood child

c. Drugs sold illegally on a local street comer

d. Prescription drugs manufactured in the United States and sold at a local pharmacy

e. A rug woven by hand in Turkey

f. Air pollution that diminishes the quality of the air you breathe

g. Toxic-waste cleanup performed by a local company

h. Car parts manufactured in the United States for a car assembled in Mexico

i. A purchase of 1,000 shares of IBM stock

j. Monthly Social Security payments received by a retiree

Expert Solution

To determine

(a)

To explain:

Whether cleaning services can be included in the gross domestic product.

Answer to Problem 2P

Yes, the services by MM Corporation will be included in gross domestic product.

Explanation of Solution

The services by the MM Corporation is included in the gross domestic product because it has a significant effect in the country's economy.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Expert Solution

To determine

(b)

To explain:

Whetherlawn-mowing services performed by a child of neighborhood can be included in the gross domestic product.

Answer to Problem 2P

No, lawn-mowing services performed by a child of neighborhood is not included in gross domestic product.

Explanation of Solution

The lawn-mowing services performed by child in neighborhood are not included in the gross domestic product because it does not have a significant effect on the country's economy. It does not account for any flow in the national income. Therefore, it will not be included in gross domestic product.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Expert Solution

To determine

(c)

To explain:

Whether if drugs sold illegally on a local street corner can be included in gross domestic product.

Answer to Problem 2P

No, drugs sold illegally on a local street corner are not included in gross domestic product.

Explanation of Solution

The drugs sold illegally on a local street are not included in the gross domestic product because it is illegal and GDP does not count products and services that are producedillegally.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Expert Solution

To determine

(d)

To explain:

Whether the prescribed drugs manufactured at the United States and sold at a local pharmacy can be included in the Gross Domestic Product.

Answer to Problem 2P

Yes, the prescribed drugs manufactured in the Unites States and sold at a local pharmacy are included in gross domestic product.

Explanation of Solution

The prescribed drugs manufactured inthe United States and sold at a local pharmacy are included in the gross domestic product. These drugs areproduced legally within the country, thus these drugs as a final product contribute to gross domestic product.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Expert Solution

To determine

(e)

To explain:

Whether a hand-woven rug made in Turkey can be included in Gross Domestic Product.

Answer to Problem 2P

No, a hand-woven rug in Turkey cannot be included in Gross Domestic Product.

Explanation of Solution

The hand woven rug can be included in the gross domestic product because it has a significant effect on the country's economy.However, this hand woven rug was made in Turkey, this means it was produced outside the border of the country. Hence, this cannot be included in the GDP.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Expert Solution

To determine

(f)

To explain:

Whether air pollution can be included in the gross domestic product.

Answer to Problem 2P

No, air pollution that diminishes the quality of air is not included in the gross domestic product.

Explanation of Solution

Air pollution that diminishes the quality of air is not included in the gross domestic product as it does not add any value to the national income. It is altogether a different concept of environment pollution.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Expert Solution

To determine

(g)

To explain:

Whether the toxic waste cleanup performed by a local company is included in the Gross Domestic Product.

Answer to Problem 2P

Yes, the toxic waste cleanup performed by a local company is included in the Gross Domestic

Product.

Explanation of Solution

The toxic waste cleanup performed by a local company is included in the gross domestic productas it provides with a service, which generates income for the economy; thus, it will be included in the Gross Domestic Product.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Expert Solution

To determine

(h)

To explain:

Whether the car parts manufactured in the United States for a car assembled in Mexico are included in Gross Domestic Product.

Answer to Problem 2P

Yes, the car parts manufactured in the United States for a car assembled in Mexico can be included in gross domestic product.

Explanation of Solution

The car parts manufactured in the United States for a car assembled in Mexico are included in the gross domestic product because it has a significant effect in the country's economy. It generates income through the assembly units that are present within the country. The car parts manufacturer are providing employment, generating revenue through the final product.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Expert Solution

To determine

(i)

To explain:

Whether the purchase of shares of 1,000 IBM stock is included in gross domestic product.

Answer to Problem 2P

No, the purchase of 1,000 IBM stock is not included in the gross domestic product.

Explanation of Solution

The purchase of 1,000 IBM stock is not included in the gross domestic product because it does not have any significant effect on the country's economy as only the owner of stock is changing.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Expert Solution

To determine

(j)

To explain:

Whether the monthly social security payments received by a retiree can be included in the gross domestic product.

Answer to Problem 2P

No, the monthly social security payment received by a retiree is not included in the gross domestic product.

Explanation of Solution

The monthly social security payment received by a retiree is not included in the gross domestic product because it does not have a significant effect in the country's economy and it will also lead to double counting.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Textbook Question

Chapter 11, Problem 2P

Which of the following are included in GDP calculations?

a. Cleaning services performed by Molly Maid Corporation

b. Lawn-mowing services performed by a neighborhood child

c. Drugs sold illegally on a local street comer

d. Prescription drugs manufactured in the United States and sold at a local pharmacy

e. A rug woven by hand in Turkey

f. Air pollution that diminishes the quality of the air you breathe

g. Toxic-waste cleanup performed by a local company

h. Car parts manufactured in the United States for a car assembled in Mexico

i. A purchase of 1,000 shares of IBM stock

j. Monthly Social Security payments received by a retiree

Expert Solution

To determine

(a)

To explain:

Whether cleaning services can be included in the gross domestic product.

Answer to Problem 2P

Yes, the services by MM Corporation will be included in gross domestic product.

Explanation of Solution

The services by the MM Corporation is included in the gross domestic product because it has a significant effect in the country's economy.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Expert Solution

To determine

(b)

To explain:

Whetherlawn-mowing services performed by a child of neighborhood can be included in the gross domestic product.

Answer to Problem 2P

No, lawn-mowing services performed by a child of neighborhood is not included in gross domestic product.

Explanation of Solution

The lawn-mowing services performed by child in neighborhood are not included in the gross domestic product because it does not have a significant effect on the country's economy. It does not account for any flow in the national income. Therefore, it will not be included in gross domestic product.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Expert Solution

To determine

(c)

To explain:

Whether if drugs sold illegally on a local street corner can be included in gross domestic product.

Answer to Problem 2P

No, drugs sold illegally on a local street corner are not included in gross domestic product.

Explanation of Solution

The drugs sold illegally on a local street are not included in the gross domestic product because it is illegal and GDP does not count products and services that are producedillegally.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Expert Solution

To determine

(d)

To explain:

Whether the prescribed drugs manufactured at the United States and sold at a local pharmacy can be included in the Gross Domestic Product.

Answer to Problem 2P

Yes, the prescribed drugs manufactured in the Unites States and sold at a local pharmacy are included in gross domestic product.

Explanation of Solution

The prescribed drugs manufactured inthe United States and sold at a local pharmacy are included in the gross domestic product. These drugs areproduced legally within the country, thus these drugs as a final product contribute to gross domestic product.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Expert Solution

To determine

(e)

To explain:

Whether a hand-woven rug made in Turkey can be included in Gross Domestic Product.

Answer to Problem 2P

No, a hand-woven rug in Turkey cannot be included in Gross Domestic Product.

Explanation of Solution

The hand woven rug can be included in the gross domestic product because it has a significant effect on the country's economy.However, this hand woven rug was made in Turkey, this means it was produced outside the border of the country. Hence, this cannot be included in the GDP.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Expert Solution

To determine

(f)

To explain:

Whether air pollution can be included in the gross domestic product.

Answer to Problem 2P

No, air pollution that diminishes the quality of air is not included in the gross domestic product.

Explanation of Solution

Air pollution that diminishes the quality of air is not included in the gross domestic product as it does not add any value to the national income. It is altogether a different concept of environment pollution.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Expert Solution

To determine

(g)

To explain:

Whether the toxic waste cleanup performed by a local company is included in the Gross Domestic Product.

Answer to Problem 2P

Yes, the toxic waste cleanup performed by a local company is included in the Gross Domestic

Product.

Explanation of Solution

The toxic waste cleanup performed by a local company is included in the gross domestic productas it provides with a service, which generates income for the economy; thus, it will be included in the Gross Domestic Product.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Expert Solution

To determine

(h)

To explain:

Whether the car parts manufactured in the United States for a car assembled in Mexico are included in Gross Domestic Product.

Answer to Problem 2P

Yes, the car parts manufactured in the United States for a car assembled in Mexico can be included in gross domestic product.

Explanation of Solution

The car parts manufactured in the United States for a car assembled in Mexico are included in the gross domestic product because it has a significant effect in the country's economy. It generates income through the assembly units that are present within the country. The car parts manufacturer are providing employment, generating revenue through the final product.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Expert Solution

To determine

(i)

To explain:

Whether the purchase of shares of 1,000 IBM stock is included in gross domestic product.

Answer to Problem 2P

No, the purchase of 1,000 IBM stock is not included in the gross domestic product.

Explanation of Solution

The purchase of 1,000 IBM stock is not included in the gross domestic product because it does not have any significant effect on the country's economy as only the owner of stock is changing.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Expert Solution

To determine

(j)

To explain:

Whether the monthly social security payments received by a retiree can be included in the gross domestic product.

Answer to Problem 2P

No, the monthly social security payment received by a retiree is not included in the gross domestic product.

Explanation of Solution

The monthly social security payment received by a retiree is not included in the gross domestic product because it does not have a significant effect in the country's economy and it will also lead to double counting.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

Expert Solution

To determine

(a)

To explain:

Whether cleaning services can be included in the gross domestic product.

Answer to Problem 2P

Yes, the services by MM Corporation will be included in gross domestic product.

Explanation of Solution

The services by the MM Corporation is included in the gross domestic product because it has a significant effect in the country's economy.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Expert Solution

To determine

(b)

To explain:

Whetherlawn-mowing services performed by a child of neighborhood can be included in the gross domestic product.

Answer to Problem 2P

No, lawn-mowing services performed by a child of neighborhood is not included in gross domestic product.

Explanation of Solution

The lawn-mowing services performed by child in neighborhood are not included in the gross domestic product because it does not have a significant effect on the country's economy. It does not account for any flow in the national income. Therefore, it will not be included in gross domestic product.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Expert Solution

To determine

(c)

To explain:

Whether if drugs sold illegally on a local street corner can be included in gross domestic product.

Answer to Problem 2P

No, drugs sold illegally on a local street corner are not included in gross domestic product.

Explanation of Solution

The drugs sold illegally on a local street are not included in the gross domestic product because it is illegal and GDP does not count products and services that are producedillegally.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Expert Solution

To determine

(d)

To explain:

Whether the prescribed drugs manufactured at the United States and sold at a local pharmacy can be included in the Gross Domestic Product.

Answer to Problem 2P

Yes, the prescribed drugs manufactured in the Unites States and sold at a local pharmacy are included in gross domestic product.

Explanation of Solution

The prescribed drugs manufactured inthe United States and sold at a local pharmacy are included in the gross domestic product. These drugs areproduced legally within the country, thus these drugs as a final product contribute to gross domestic product.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Expert Solution

To determine

(e)

To explain:

Whether a hand-woven rug made in Turkey can be included in Gross Domestic Product.

Answer to Problem 2P

No, a hand-woven rug in Turkey cannot be included in Gross Domestic Product.

Explanation of Solution

The hand woven rug can be included in the gross domestic product because it has a significant effect on the country's economy.However, this hand woven rug was made in Turkey, this means it was produced outside the border of the country. Hence, this cannot be included in the GDP.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Expert Solution

To determine

(f)

To explain:

Whether air pollution can be included in the gross domestic product.

Answer to Problem 2P

No, air pollution that diminishes the quality of air is not included in the gross domestic product.

Explanation of Solution

Air pollution that diminishes the quality of air is not included in the gross domestic product as it does not add any value to the national income. It is altogether a different concept of environment pollution.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Expert Solution

To determine

(g)

To explain:

Whether the toxic waste cleanup performed by a local company is included in the Gross Domestic Product.

Answer to Problem 2P

Yes, the toxic waste cleanup performed by a local company is included in the Gross Domestic

Product.

Explanation of Solution

The toxic waste cleanup performed by a local company is included in the gross domestic productas it provides with a service, which generates income for the economy; thus, it will be included in the Gross Domestic Product.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Expert Solution

To determine

(h)

To explain:

Whether the car parts manufactured in the United States for a car assembled in Mexico are included in Gross Domestic Product.

Answer to Problem 2P

Yes, the car parts manufactured in the United States for a car assembled in Mexico can be included in gross domestic product.

Explanation of Solution

The car parts manufactured in the United States for a car assembled in Mexico are included in the gross domestic product because it has a significant effect in the country's economy. It generates income through the assembly units that are present within the country. The car parts manufacturer are providing employment, generating revenue through the final product.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Expert Solution

To determine

(i)

To explain:

Whether the purchase of shares of 1,000 IBM stock is included in gross domestic product.

Answer to Problem 2P

No, the purchase of 1,000 IBM stock is not included in the gross domestic product.

Explanation of Solution

The purchase of 1,000 IBM stock is not included in the gross domestic product because it does not have any significant effect on the country's economy as only the owner of stock is changing.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Expert Solution

To determine

(j)

To explain:

Whether the monthly social security payments received by a retiree can be included in the gross domestic product.

Answer to Problem 2P

No, the monthly social security payment received by a retiree is not included in the gross domestic product.

Explanation of Solution

The monthly social security payment received by a retiree is not included in the gross domestic product because it does not have a significant effect in the country's economy and it will also lead to double counting.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Answer 8

Expert Solution

To determine

(a)

To explain:

Whether cleaning services can be included in the gross domestic product.

Answer to Problem 2P

Yes, the services by MM Corporation will be included in gross domestic product.

Explanation of Solution

The services by the MM Corporation is included in the gross domestic product because it has a significant effect in the country's economy.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Answer 9

Expert Solution

Answer 10

Expert Solution

Answer 11

Expert Solution

Answer 12

To determine

(a)

To explain:

Whether cleaning services can be included in the gross domestic product.

Answer 13

Answer to Problem 2P

Yes, the services by MM Corporation will be included in gross domestic product.

Answer 14

Explanation of Solution

The services by the MM Corporation is included in the gross domestic product because it has a significant effect in the country's economy.

Answer 15

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Answer 16

Expert Solution

To determine

(b)

To explain:

Whetherlawn-mowing services performed by a child of neighborhood can be included in the gross domestic product.

Answer to Problem 2P

No, lawn-mowing services performed by a child of neighborhood is not included in gross domestic product.

Explanation of Solution

The lawn-mowing services performed by child in neighborhood are not included in the gross domestic product because it does not have a significant effect on the country's economy. It does not account for any flow in the national income. Therefore, it will not be included in gross domestic product.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Answer 17

Expert Solution

Answer 18

Expert Solution

Answer 19

Expert Solution

Answer 20

To determine

(b)

To explain:

Whetherlawn-mowing services performed by a child of neighborhood can be included in the gross domestic product.

Answer 21

Answer to Problem 2P

No, lawn-mowing services performed by a child of neighborhood is not included in gross domestic product.

Answer 22

Explanation of Solution

The lawn-mowing services performed by child in neighborhood are not included in the gross domestic product because it does not have a significant effect on the country's economy. It does not account for any flow in the national income. Therefore, it will not be included in gross domestic product.

Answer 23

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Answer 24

Expert Solution

To determine

(c)

To explain:

Whether if drugs sold illegally on a local street corner can be included in gross domestic product.

Answer to Problem 2P

No, drugs sold illegally on a local street corner are not included in gross domestic product.

Explanation of Solution

The drugs sold illegally on a local street are not included in the gross domestic product because it is illegal and GDP does not count products and services that are producedillegally.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Answer 25

Expert Solution

Answer 26

Expert Solution

Answer 27

Expert Solution

Answer 28

To determine

(c)

To explain:

Whether if drugs sold illegally on a local street corner can be included in gross domestic product.

Answer 29

Answer to Problem 2P

No, drugs sold illegally on a local street corner are not included in gross domestic product.

Answer 30

Explanation of Solution

The drugs sold illegally on a local street are not included in the gross domestic product because it is illegal and GDP does not count products and services that are producedillegally.

Answer 31

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Answer 32

Expert Solution

To determine

(d)

To explain:

Whether the prescribed drugs manufactured at the United States and sold at a local pharmacy can be included in the Gross Domestic Product.

Answer to Problem 2P

Yes, the prescribed drugs manufactured in the Unites States and sold at a local pharmacy are included in gross domestic product.

Explanation of Solution

The prescribed drugs manufactured inthe United States and sold at a local pharmacy are included in the gross domestic product. These drugs areproduced legally within the country, thus these drugs as a final product contribute to gross domestic product.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Answer 33

Expert Solution

Answer 34

Expert Solution

Answer 35

Expert Solution

Answer 36

To determine

(d)

To explain:

Whether the prescribed drugs manufactured at the United States and sold at a local pharmacy can be included in the Gross Domestic Product.

Answer 37

Answer to Problem 2P

Yes, the prescribed drugs manufactured in the Unites States and sold at a local pharmacy are included in gross domestic product.

Answer 38

Explanation of Solution

The prescribed drugs manufactured inthe United States and sold at a local pharmacy are included in the gross domestic product. These drugs areproduced legally within the country, thus these drugs as a final product contribute to gross domestic product.

Answer 39

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Answer 40

Expert Solution

To determine

(e)

To explain:

Whether a hand-woven rug made in Turkey can be included in Gross Domestic Product.

Answer to Problem 2P

No, a hand-woven rug in Turkey cannot be included in Gross Domestic Product.

Explanation of Solution

The hand woven rug can be included in the gross domestic product because it has a significant effect on the country's economy.However, this hand woven rug was made in Turkey, this means it was produced outside the border of the country. Hence, this cannot be included in the GDP.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Answer 41

Expert Solution

Answer 42

Expert Solution

Answer 43

Expert Solution

Answer 44

To determine

(e)

To explain:

Whether a hand-woven rug made in Turkey can be included in Gross Domestic Product.

Answer 45

Answer to Problem 2P

No, a hand-woven rug in Turkey cannot be included in Gross Domestic Product.

Answer 46

Explanation of Solution

The hand woven rug can be included in the gross domestic product because it has a significant effect on the country's economy.However, this hand woven rug was made in Turkey, this means it was produced outside the border of the country. Hence, this cannot be included in the GDP.

Answer 47

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Answer 48

Expert Solution

To determine

(f)

To explain:

Whether air pollution can be included in the gross domestic product.

Answer to Problem 2P

No, air pollution that diminishes the quality of air is not included in the gross domestic product.

Explanation of Solution

Air pollution that diminishes the quality of air is not included in the gross domestic product as it does not add any value to the national income. It is altogether a different concept of environment pollution.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Answer 49

Expert Solution

Answer 50

Expert Solution

Answer 51

Expert Solution

Answer 52

To determine

(f)

To explain:

Whether air pollution can be included in the gross domestic product.

Answer 53

Answer to Problem 2P

No, air pollution that diminishes the quality of air is not included in the gross domestic product.

Answer 54

Explanation of Solution

Air pollution that diminishes the quality of air is not included in the gross domestic product as it does not add any value to the national income. It is altogether a different concept of environment pollution.

Answer 55

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Answer 56

Expert Solution

To determine

(g)

To explain:

Whether the toxic waste cleanup performed by a local company is included in the Gross Domestic Product.

Answer to Problem 2P

Yes, the toxic waste cleanup performed by a local company is included in the Gross Domestic

Product.

Explanation of Solution

The toxic waste cleanup performed by a local company is included in the gross domestic productas it provides with a service, which generates income for the economy; thus, it will be included in the Gross Domestic Product.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Answer 57

Expert Solution

Answer 58

Expert Solution

Answer 59

Expert Solution

Answer 60

To determine

(g)

To explain:

Whether the toxic waste cleanup performed by a local company is included in the Gross Domestic Product.

Answer 61

Answer to Problem 2P

Yes, the toxic waste cleanup performed by a local company is included in the Gross Domestic

Product.

Answer 62

Explanation of Solution

The toxic waste cleanup performed by a local company is included in the gross domestic productas it provides with a service, which generates income for the economy; thus, it will be included in the Gross Domestic Product.

Answer 63

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Answer 64

Expert Solution

To determine

(h)

To explain:

Whether the car parts manufactured in the United States for a car assembled in Mexico are included in Gross Domestic Product.

Answer to Problem 2P

Yes, the car parts manufactured in the United States for a car assembled in Mexico can be included in gross domestic product.

Explanation of Solution

The car parts manufactured in the United States for a car assembled in Mexico are included in the gross domestic product because it has a significant effect in the country's economy. It generates income through the assembly units that are present within the country. The car parts manufacturer are providing employment, generating revenue through the final product.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Answer 65

Expert Solution

Answer 66

Expert Solution

Answer 67

Expert Solution

Answer 68

To determine

(h)

To explain:

Whether the car parts manufactured in the United States for a car assembled in Mexico are included in Gross Domestic Product.

Answer 69

Answer to Problem 2P

Yes, the car parts manufactured in the United States for a car assembled in Mexico can be included in gross domestic product.

Answer 70

Explanation of Solution

The car parts manufactured in the United States for a car assembled in Mexico are included in the gross domestic product because it has a significant effect in the country's economy. It generates income through the assembly units that are present within the country. The car parts manufacturer are providing employment, generating revenue through the final product.

Answer 71

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Answer 72

Expert Solution

To determine

(i)

To explain:

Whether the purchase of shares of 1,000 IBM stock is included in gross domestic product.

Answer to Problem 2P

No, the purchase of 1,000 IBM stock is not included in the gross domestic product.

Explanation of Solution

The purchase of 1,000 IBM stock is not included in the gross domestic product because it does not have any significant effect on the country's economy as only the owner of stock is changing.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Answer 73

Expert Solution

Answer 74

Expert Solution

Answer 75

Expert Solution

Answer 76

To determine

(i)

To explain:

Whether the purchase of shares of 1,000 IBM stock is included in gross domestic product.

Answer 77

Answer to Problem 2P

No, the purchase of 1,000 IBM stock is not included in the gross domestic product.

Answer 78

Explanation of Solution

The purchase of 1,000 IBM stock is not included in the gross domestic product because it does not have any significant effect on the country's economy as only the owner of stock is changing.

Answer 79

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Answer 80

Expert Solution

To determine

(j)

To explain:

Whether the monthly social security payments received by a retiree can be included in the gross domestic product.

Answer to Problem 2P

No, the monthly social security payment received by a retiree is not included in the gross domestic product.

Explanation of Solution

The monthly social security payment received by a retiree is not included in the gross domestic product because it does not have a significant effect in the country's economy and it will also lead to double counting.

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.

Answer 81

Expert Solution

Answer 82

Expert Solution

Answer 83

Expert Solution

Answer 84

To determine

(j)

To explain:

Whether the monthly social security payments received by a retiree can be included in the gross domestic product.

Answer 85

Answer to Problem 2P

No, the monthly social security payment received by a retiree is not included in the gross domestic product.

Answer 86

Explanation of Solution

The monthly social security payment received by a retiree is not included in the gross domestic product because it does not have a significant effect in the country's economy and it will also lead to double counting.

Answer 87

Economics Concept Introduction

Gross Domestic Product:

The calculated value of a country's economic activity is known as gross domestic product. The price value of all finished goods and services manufactured within a country are included in deriving the value of GDP for a specific financial period.