Economics: Principles and Policy (MindTap Course List)
13th Edition
ISBN: 9781305280595
Author: William J. Baumol, Alan S. Blinder
Publisher: Cengage Learning
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Chapter 26.B, Problem 1TY
To determine
Calculate the net exports.
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The following table shows the composition of GDP in 2015 for a hypothetical country. Complete the table by recording
values for GDP, residential investment, and net exports. (Enter your responses as integers and use minus signs if
necessary.)
The Composition of GDP, 2015
GDP (Y)
1 Consumption (C)
2
Investment (/)
3
4
Nonresidential
Residential
Government spending (G)
Net exports
Exports (X)
Imports (IM)
5 Inventory investment
Billions of Dollars
12,438
2,671
2,206
3,102
1,963
2,265
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Chapter 26 Solutions
Economics: Principles and Policy (MindTap Course List)
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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 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_forwardPaolo and Sharon Zambetti live in Swarthmore, PA. Their son, Van, is an artist living in New York City. 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 C I G X M Paolo buys a bottle of Italian wine. Sharon gets a haircut. Van paints a landscape and sells it to an art collector in Japan. The Zambettis build an addition on their house. The Federal Aviation Administration expands the runways at Philadelphia International Airport, which is just a few miles from Paolo and Sharon's house.arrow_forward
- Calculate net exports if it's given that exports is $350 million and imports is $100 millionarrow_forwardBob and Cho Tokarev live in Conshohocken, PA. Cho's father, Eric, 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 (1), government purchases (G), exports (X), or imports (M). Check all that apply. Transaction The Federal Aviation Administration expands the runways at Philadelphia International Airport, which is just a few miles from Bob and Cho's house.. Cho gets a new video camera made in the United States. Cho buys a new BMW, which was assembled in Germany. Bob's employer upgrades all of its computer systems using U.S.-made parts. Cho's father in Sweden orders a bottle of Vermont maple syrup from the producer's website. C 3 000 I D G X M 000arrow_forwardIs it reasonable or does it make sense, that while US exports are added to GDP, US imports are subtracted from GDP?arrow_forward
- Consider the expenditure approach to the measurement of GDP. For each of the following situations, decide if the transaction will affect GDP and, if so, in which expenditure category will it be included. A household purchase of a home built in 2005. A household purchase of a newly built dishwasher. A farmer purchases a new tractor to work his or her field. A disabled individual receives a transfer from Oman government. The Sultanate Department of Defence buys ten helicopters just built in the U.S.A.arrow_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_forwardChanges in business inventory will be calculated in GDP under which of the following categories? A) Government Spending B) Net Exports C) Consumer Spending D) Investment Spendingarrow_forward
- If exports are $390 and imports is $200 Calculate net exportsarrow_forwardIf Rajal buys some land, hoping to build a house on it in the near future, this purchase would be included in GDP as: net exports none of these investment consumption government purchasesarrow_forwardIs it true that the value of U.S. imports is added to exports when calculating U.S. GDP because imports reflect spending by Americans? Explain.arrow_forward
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