Macroeconomics (Cloth) (Instructor's)
10th Edition
ISBN: 9781319106003
Author: Mankiw
Publisher: MAC HIGHER
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Chapter 2, Problem 3QR
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Describe the GDP deflator and how it is used to measure inflation.
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List some of the reasons why economists should not consider GDP an effective measure of the standard of living in a country.
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- Why might even real GDP be a misleading index of changes in output between 1950 and 2015 in the United States?arrow_forwardList some of the reasons why economists should not consider GDP an effective measure of the standard of living in a county.arrow_forwardWhich 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 retireearrow_forward
- What is the difference between using a measure of inflation such as the consumer prices index (CPI) and the GDP deflator? Which do you think is the more accurate measure of price changes in an economy?arrow_forwardWhat would happen to measured GDP if more people started hiring workers to do house chores such as cooking and cleaning?arrow_forwardGDP is an important measure of economic activity, telling us about production as well as employment and income. However, it is not a perfect measure. What are two problems with using GDP to measure the standard of living?arrow_forward
- Are there problems with GDP that should be fixed?arrow_forwardDiscuss some of the reasons why economists should not consider GDP an effective measure of the standard of living in a countryarrow_forwardHow will you differentiate nominal GDP from real GDP? Which one (nominal or real) do you consider as the best and most relevant measure economic well-being and why?arrow_forward
- Suppose the information in the following table is for a simple economy that produces only four goods and services: shoes, hamburgers, shirts, and cotton. Assume that shoes, hamburgers, and shirts are final goods and that all the cotton is used in the production of shirts. Calculate the GDP deflator for 2015. Use 2009 as the base year for the calculations. Provide your answer as a number rounded to two decimal places. Do not include any symbols, such as "$," "=," "%," or "," in your answer.arrow_forwardq6arrow_forwardwhat is the difference between nominal GDP and real GDP? what is the methodological procedure to calculate each concept?arrow_forward
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