Explain why the GDP is higher this year than last year.

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Answer 1

Question

Chapter 7, Problem 1QP

To determine

Explain why the GDP is higher this year than last year.

Expert Solution & Answer

Explanation of Solution

In this case, the statement does not refer to the real GDP because it refers to the nominal GDP. In general, increase in nominal GDP was due to higher price. If the real GDP increases, then the countries’ well-being will decrease, bad associated with the increased production of goods and services. Therefore, if the population grows faster than GDP, then the country’s per capita GDP will decrease in an economy.

Economics Concept Introduction

GDP (Gross Domestic Product): GDP refers to the market value of all final goods and services produced in an economy during an accounting year.

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Problem 3 You are given the following demand for European luxury automobiles: Q=1,000 P-0.5.2/1.6 where P-Price of European luxury cars PA = Price of American luxury cars P, Price of Japanese luxury cars I= Annual income of car buyers Assume that each of the coefficients is statistically significant (i.e., that they passed the t-test). On the basis of the information given, answer the following questions 1. Comment on the degree of substitutability between European and American luxury cars and between European and Japanese luxury cars. Explain some possible reasons for the results in the equation. 2. Comment on the coefficient for the income variable. Is this result what you would expect? Explain. 3. Comment on the coefficient of the European car price variable. Is that what you would expect? Explain.

Problem 2: A manufacturer of computer workstations gathered average monthly sales figures from its 56 branch offices and dealerships across the country and estimated the following demand for its product: Q=+15,000-2.80P+150A+0.3P+0.35Pm+0.2Pc (5,234) (1.29) (175) (0.12) (0.17) (0.13) R²=0.68 SER 786 F=21.25 The variables and their assumed values are P = Price of basic model = 7,000 Q==Quantity A = Advertising expenditures (in thousands) = 52 P = Average price of a personal computer = 4,000 P. Average price of a minicomputer = 15,000 Pe Average price of a leading competitor's workstation = 8,000 1. Compute the elasticities for each variable. On this basis, discuss the relative impact that each variable has on the demand. What implications do these results have for the firm's marketing and pricing policies? 2. Conduct a t-test for the statistical significance of each variable. In each case, state whether a one-tail or two-tail test is required. What difference, if any, does it make to…

Answer 2

Question

Chapter 7, Problem 1QP

To determine

Explain why the GDP is higher this year than last year.

Expert Solution & Answer

Explanation of Solution

In this case, the statement does not refer to the real GDP because it refers to the nominal GDP. In general, increase in nominal GDP was due to higher price. If the real GDP increases, then the countries’ well-being will decrease, bad associated with the increased production of goods and services. Therefore, if the population grows faster than GDP, then the country’s per capita GDP will decrease in an economy.

Economics Concept Introduction

GDP (Gross Domestic Product): GDP refers to the market value of all final goods and services produced in an economy during an accounting year.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 7, Problem 1QP

To determine

Explain why the GDP is higher this year than last year.

Expert Solution & Answer

Explanation of Solution

In this case, the statement does not refer to the real GDP because it refers to the nominal GDP. In general, increase in nominal GDP was due to higher price. If the real GDP increases, then the countries’ well-being will decrease, bad associated with the increased production of goods and services. Therefore, if the population grows faster than GDP, then the country’s per capita GDP will decrease in an economy.

Economics Concept Introduction

GDP (Gross Domestic Product): GDP refers to the market value of all final goods and services produced in an economy during an accounting year.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 7, Problem 1QP

To determine

Explain why the GDP is higher this year than last year.

Expert Solution & Answer

Explanation of Solution

In this case, the statement does not refer to the real GDP because it refers to the nominal GDP. In general, increase in nominal GDP was due to higher price. If the real GDP increases, then the countries’ well-being will decrease, bad associated with the increased production of goods and services. Therefore, if the population grows faster than GDP, then the country’s per capita GDP will decrease in an economy.

Economics Concept Introduction

GDP (Gross Domestic Product): GDP refers to the market value of all final goods and services produced in an economy during an accounting year.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 7, Problem 1QP

To determine

Explain why the GDP is higher this year than last year.

Expert Solution & Answer

Explanation of Solution

In this case, the statement does not refer to the real GDP because it refers to the nominal GDP. In general, increase in nominal GDP was due to higher price. If the real GDP increases, then the countries’ well-being will decrease, bad associated with the increased production of goods and services. Therefore, if the population grows faster than GDP, then the country’s per capita GDP will decrease in an economy.

Economics Concept Introduction

GDP (Gross Domestic Product): GDP refers to the market value of all final goods and services produced in an economy during an accounting year.

Answer 6

Chapter 7, Problem 1QP

To determine

Explain why the GDP is higher this year than last year.

Expert Solution & Answer

Explanation of Solution

In this case, the statement does not refer to the real GDP because it refers to the nominal GDP. In general, increase in nominal GDP was due to higher price. If the real GDP increases, then the countries’ well-being will decrease, bad associated with the increased production of goods and services. Therefore, if the population grows faster than GDP, then the country’s per capita GDP will decrease in an economy.

Economics Concept Introduction

GDP (Gross Domestic Product): GDP refers to the market value of all final goods and services produced in an economy during an accounting year.

Answer 7

Chapter 7, Problem 1QP

To determine

Explain why the GDP is higher this year than last year.

Answer 8

Expert Solution & Answer

Explanation of Solution

In this case, the statement does not refer to the real GDP because it refers to the nominal GDP. In general, increase in nominal GDP was due to higher price. If the real GDP increases, then the countries’ well-being will decrease, bad associated with the increased production of goods and services. Therefore, if the population grows faster than GDP, then the country’s per capita GDP will decrease in an economy.