Macroeconomics (MindTap Course List)
10th Edition
ISBN: 9781285859477
Author: William Boyes, Michael Melvin
Publisher: Cengage Learning
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Question
Chapter 5, Problem 1E
To determine
The below table lists the stages in the production of a personal computer. Find the value of the computer in
| Stage | Value Added |
| Company Manufacture | $100 |
| Assembly | $250 |
| Wholesaler | $500 |
| Retailer | $1,850 |
Expert Solution & Answer
Answer to Problem 1E
The value of computer in the GDP is
Explanation of Solution
The real value of GDP at each stage is calculated as follows:
| Stage | Value Added | Real Value Added |
| Components Manufacture |
|
|
| Assembly |
|
|
| Wholesaler |
|
|
| Retailer |
|
|
| Total Value |
|
Hence, the value of computer in the GDP is
Economics Concept Introduction
Gross Domestic Product- Gross Domestic Product or GDP is referred to as the market value of all the services and final goods which has been produced in a period.
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Students have asked these similar questions
I Consider a country that produces only wheat and corn. Based on the data in the table,
calculate the country's real GDP for year 2008 (assume 2005 as the base year) is:
Price of Wheat
(per bushel)
$56
Quantity of Wheat
(million bushels)
1.250
1,360
1,420
1,500
Price of Corn Quantity of Corn
Year
2005
2006
2007
2008
(per bushel)
$44
(million tons)
910
64
1,050
1,120
1,260
52
72
55
62
Consider the following data on U.S. GDP:
Year
GDP
(Billions of current dollars)
(Billions of 2012 dollars)
2014
17,521.7
16,899.8
2015
18,219.3
17,386.7
2016
18,707.2
17,659.2
2017
19,485.4
18,050.7
2018
20,494.1
18,566.4
Source: “National Economic Accounts.”U.S. Bureau of Economic Analysis.
The percentage change in nominal GDP from 2017 to 2018 was .
The percentage change in real GDP from 2016 to 2017 was .
True or False: The percentage change in real GDP from 2015 to 2016 was higher than the percentage change in real GDP from 2016 to 2017.
True or False
Explain the initial effect of each of the following events on Canada’s GDP.
a) Toby sells his used car to Maria.
b) The value of your Home Depot stock holdings decrease.
c) You use $100,000 to buy a piece of land with the intention of building a new house on it.
d) Sharon buys a new pair of jeans at a department store in another town in her province.
e) An Irish tourist drinks an American beer in a Canadian restaurant.
f) Your local car dealership reduces its inventory by offering price reductions.
g) You sell all the shares in your Canadian National Railway Company holdings.
h) Jermaine travels with Air Canada to Grenada and buys rum and spices.
i) Bickram gets a haircut and beard trimmed at his local barbershop.
j) Katherine, a retired worker, gets an increase in her Canada Pension Plan benefits.
Chapter 5 Solutions
Macroeconomics (MindTap Course List)
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- ceal-Time Data Analysis Exercise Ise the data in the following table to calculate the GDP deflator for each year (values are in billions of dollars, enter your response rounded to two decimal places - remember to multiply by 100). Source: Federal Reserve Bank of St. Louis (FRED) (research.stlouisfed.org/fred2/). Year Nominal GDP Real GDP GDP Deflator 2016 $18,745 $17,731 2017 19,543 18,144 8,688 19.092 2018 20,612 2019 21.433 2020 20,935 18,423 Source: Federal Reserve Bank of St. Louis (FRED) (research.stlouisfed.org/fred2/). Which span of years saw the largest percentage increase in the price level, as measured by change in the GDP deflator? O A. 2019 to 2020 O B. 2018 to 2019 O C. 2016 to 2017 O D. 2017 to 2018arrow_forwardSuppose you have been hired as a management consultant by a major oil company to help it optimally price gasoline at its service stations. Your research has uncovered the following data: Price of Crude Oil $ 80 90 100 110 GDP 17.0 16.9 16.8 16.7 #of New Mustaches Grown Price of Gasoline $2.75 3.00 3.25 3.50 3,000 2,000 5,000 1,000 Your client has asked you to plot GDP and gasoline prices on a graph. 1.) Using the multipoint curve drawing tool, plot GDP against gasoline prices on the graph to the right. Carefully follow the instructions above and only draw the required object. Click to enlarge graph Came Gasoline Prices ($per Galon) 3.75 3.50- 3.25 3.00- 2.75 2.50+ 16,5 16.9 GOP Q 16.7 17.1 17.3 After plotting the final point of your multipoint curve, press the Esc key on your keyboard to end the line.arrow_forwardConsider 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_forward
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