Principles of Economics (12th Edition)
12th Edition
ISBN: 9780134078779
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
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Chapter 21, Problem 1.2P
To determine
To discuss which among the following transactions are counted in
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Which of the following transactions should or should not be counted in GDP?
Answer Yes or No and briefly explain your answer. Answers without explanation will not be considered
in grading, even if they are correct.
a. You buy a pair of new cowboy boots on a trip to Texas
b. You buy a pair of vintage cowboy boots from your cousin in El Paso
c. A cat burglar sells $10,000 of stolen jewelry to a fence
d. Amazon issues $1 billion worth of new shares
e. GM purchases $100 million worth of tires from Firestone
f. A private company builds a new road in Memphis Y
g. Stay-at-home parents provide an estimated $500 million of child care services
Can you do g,h,I,j
Which of the following items are included in GDP? For those items not included, explain why they are not included in GDP.
And please explain briefly.
Chapter 21 Solutions
Principles of Economics (12th Edition)
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Similar questions
- 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 retireearrow_forwardlook at this (Links https://www.cbsnews.com/news/why-gdp-fails-as-a-measure-of-well-being/) article published by CBS News. Do you agree with the author's assessment that GDP fails to measure well being? Why (or why not)? Are there things that contribute to your well-being and happiness but are excluded from the calculation of GDP? Share an example and describe why it might be excluded from the GDP calculation.arrow_forwardCan you do d,e, and farrow_forward
- Please give a fully detailed response to the question below.arrow_forwardQuestion 15 Which of the following would be included in GDP, the purchase of staplers from Staples by a car dealership and by Carl for his kids to play with at home. Both are included in BDP Neither would be included in GDP Carl's purchase would be included but the car dealerships would not The car dealership's purchase would be included but Carl's would not Question 16 Which of the following would lead to growth in GDP Investment in plant and equipment by business Investments in stocks by your 401K Purchase of a home All of the above will lead to GDP growtharrow_forwardAre the following included in US GDP? Briefly explain your answer. Used textbooks sold at your college bookstore Use books sold at a garage sale Cars made in the United States at a Toyota factory Cars made in Germany at a General Motors factory The price paid by an American tourist staying at a French hotel The price paid by a German tourist staying at a New York hotelarrow_forward
- Which of the following are included in GDP and which are not? If an item is included, state which GDP category it falls under (consumption, investment, government, trade balance) a) the cost of having your appendix removed b) buying a new car from a dealership c) buying a used car from your neighbor d) the lettuce sold to the sub shop that will go on your sandwich e) babysitting services at a licensed daycare provider f) babysitting services provided by your cousin g) a 2-year increase in life expectancyarrow_forwardPlease answer the following question: There are 2 correct answersarrow_forwarda)A caterpillar tractor is made by a U.S firm producing in the United States. Is this production counted in GDP? b) A Toyota Avalon is made by a Japanese firm producing in the United States. Is this production counted in GDP? c) Brooks running shoes are made by a U.S firm producing in China. Is this production counted in GDP?arrow_forward
- Indicate what components of GDP (if any) each of the following transactions would affect. Check all that apply. Transaction Consumption Investment Government Purchases Net Exports Your parents buy a bottle of French wine. Uncle John receives a check from the federal government for unemployment insurance benefits. Ford manufactures a Focus and sells it to Avis, the car rental company. Your parents pay an accountant to file their tax returns. Ford sells a Mustang from its inventory to the Martinez family. Aunt Jane buys a new house from a local builder. Aunt Polly buys a new air conditioner from a domestic manufacturer. Texas hires public middle school teachers.arrow_forwardWhy GDP fails as a measure of well-being There is a new reason why GDP is a poor measure of economic well- being: It doesn't measure the benefits we gain from free apps and lots of other free stuff on the Internet. And none of the other indexes deal with this problem. Source: CBS News, January 27, 2016 What are the other reasons why GDP is a poor measure of economic well-being? GDP is a poor measure of economic well-being because it O fluctuates more than potential GDP O exaggerates the depth of recessions and the height of expansions O includes only production that is traded in marketsarrow_forwarda) There are two methods of calculating GDP: income approach and expenditure approach.According to your opinion which method is better suited for calculating the GDP of Bangladesh?Briefly explain the reasons behind your answer.b) When calculating the GDP using the expenditure method why do we subtract “imports”?c) When calculating the GDP of Bangladesh using the income approach why do we add the“earnings of foreigners living in Bangladesh”?d) When calculating the GDP of Bangladesh using the income approach why do we subtract“earnings by Bangladeshis living in foreign countries”?arrow_forward
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