EBK PRINCIPLES OF ECONOMICS
7th Edition
ISBN: 8220102958395
Author: Mankiw
Publisher: CENGAGE L
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Question
Chapter 23, Problem 4QCMC
To determine
The purchase of imported commodities on national account transactions.
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An American buys a pair of shoes made in Italy.How do the U.S. national income accounts treatthe transaction?a. Net exports and GDP both rise.b. Net exports and GDP both fall.c. Net exports fall, while GDP does notchange.d. Net exports do not change, while GDPrises.
Define net exports. Explain how U.S. exports and imports each affect domestic production. Suppose foreigners spend $7 billion on U.S. exports in a specifific year and Americans spend $5 billion on imports from abroad in the same year. What is the amount of the United States’ net exports? Explain how net exports might be a negative amount.
Van and Amy Cho live in Conshohocken, PA. Amy's father, Carlos, 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
Amy's father in Sweden orders a bottle of Vermont maple syrup from the producer's website.
Amy gets a new refrigerator made in the United States.
The Pennsylvania Department of Transportation, a state administration, fixes potholes along PA highway
23, which feeds into the center of Conshohocken.
Van's employer upgrades all of its computer systems using U.S.-made parts.
Van buys a sweater made in Guatemala.
C
I
0
G
0
0
X
|
M
Chapter 23 Solutions
EBK PRINCIPLES OF ECONOMICS
Ch. 23.1 - Prob. 1QQCh. 23.2 - Prob. 2QQCh. 23.3 - Prob. 3QQCh. 23.4 - Prob. 4QQCh. 23.5 - Prob. 5QQCh. 23 - Prob. 1QRCh. 23 - Prob. 2QRCh. 23 - Prob. 3QRCh. 23 - Prob. 4QRCh. 23 - Prob. 5QR
Ch. 23 - Prob. 6QRCh. 23 - Prob. 7QRCh. 23 - Prob. 8QRCh. 23 - Prob. 1QCMCCh. 23 - Prob. 2QCMCCh. 23 - Prob. 3QCMCCh. 23 - Prob. 4QCMCCh. 23 - Prob. 5QCMCCh. 23 - Prob. 6QCMCCh. 23 - Prob. 1PACh. 23 - Prob. 2PACh. 23 - Prob. 3PACh. 23 - Prob. 4PACh. 23 - Prob. 5PACh. 23 - Prob. 6PACh. 23 - Prob. 8PACh. 23 - Prob. 9PACh. 23 - Prob. 10PACh. 23 - Prob. 11PA
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- Which of the following is added to the GDP? A. Exports B. Imports C. Net Exports D. Personal Income Taxarrow_forwardThe table below shows nominal GDP, exports, and imports for the United States. Nominal GDP, Exports, and Imports Year 2015 2016 Nominal GDP Exports Imports (billions of (billions of (billions of dollars) $2,308.0 2,334.1 LA dollars) $16,981.9 17,601.1 Instructions: Round your answers to one decimal place. If you are entering a negative number include a minus sign. a. Calculate the value of net exports in 2015. billion b. Calculate the value of net exports in 2016. billion dollars) $2,759.7 2,878.3arrow_forwardBetween 2014 and 2015, the exports of the U.S. economy decreased by $5 billion and its imports increased by $5 billion. All else equal? By how much has the GDP changed between the two years? Select one: a. None of the answers are correct b. The change in net exports will increase GDP by $5 billion. c. The change in net exports will decrease GDP by $5 billion. d. The change in net exports will decrease GDP by $10 billion. e. The decrease in exports is offset by the decrease in imports, so there is no change in net exports and no effect on GDP.arrow_forward
- In an economy, Exports = $2100 million Imports = $1750 million Calculate net exportsarrow_forwardWhich of the following best describes the relationship between net exports and national savings? a. Net Exports = National Savings – Investment b. Net Exports = Private Savings - Investment c. Net Exports = Investment - National Savings d. There is no relationship between net exports and national savings.arrow_forwardNet exports are defined as: A. exports plus imports minus tariffs. B. imports minus exports C. exports minus imports D. exports plus imports. E. exports divided by imports.arrow_forward
- need answer only part C . NI(net income) ?arrow_forwardConsumption $500Government Expenditures $200GNP $800Gross Private Domestic Investment $100Imports $100Exports $50 Questions:1. Using the data above, GDP is equal to __________________.2. Using the data above, Net Exports is equal to _____________.arrow_forwardComplete the sentences. The goods and services that we sell to people in other countries are The goods and services that we buy from people in other countries are A. net imports; net exports B. imports; exports; C. exports; imports; OD. net exports; net imports The value of exports of goods and services minus the value of imports of goods and services is A. always a positive value in the Canadian economy B. always a negative value in the Canadian economy C. called net exports D. called net importsarrow_forward
- Shane who is a farmer of a city bought a tractor worth $18,500 from an importer so that the mango orchard he is taking care of would bare more fruits to be exported later. A. Investment B. Consumption C. Import D. Net exportarrow_forward7.A Investment spending A. responds more dramatically to changes in interest rates than to changes in business confidence, expectations, or technology. B. typically increases when the interest rate falls. C. does not respond to short-term interest rates. D. responds negatively to technical change and product innovation. 7.B Net exports in the United States A. will fall if prices in the United States rise relative to other nations' prices. B. will fall if China reduces trade barriers against the United States. C. will increase if prices in the United States rise relative to other nations' prices. D. will increase if the price level in China declines. 7.C In an Aggregate Demand (AD)/Aggregate Supply (AS) diagram, __________________________ could explain a rise in cyclical unemployment? A. a shift in AS to the left B. a shift in AS to the right C. a shift to the left in either AS or AD…arrow_forwardIn the economy of Ukzten in 2010, GDP was $8000, consumption was $5300, government spending was $1800, exports were $200, and imports were $500. What was Uketen's investment? ( Show calculations)arrow_forward
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