Measuring the Size of the Economy, introduces Gross Domestic Product, which is the value of all goods and services produced in a country in a given year. It is sometimes thought of as our nation’s income. For this discussion, your task is to: Explain the merits, and why we would expect to see a correlation between GDP and well-being. Explain the shortfalls of analyzing GDP, by itself, to assess the state of the economy.

Measuring the Size of the Economy, introduces Gross Domestic Product, which is the value of all goods and services produced in a country in a given year. It is sometimes thought of as our nation’s income. For this discussion, your task is to: Explain the merits, and why we would expect to see a correlation between GDP and well-being. Explain the shortfalls of analyzing GDP, by itself, to assess the state of the economy.

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter15: Gross Domestic Product

Section: Chapter Questions

Problem 12SQP

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National income accounting for a certain country in the year for 2020 is given in Table 2. Based on the table, answer the following questions. Amount in $ (million) 180 8,120 3,800 1,320 4,230 12,000 10,120 12,100 8,000 3,120 3,240 Items Net factor income Consumption expenditure Public investments Import Export Government expenditure Wages Interest, rent and profit Indirect taxes Subsidies Depreciation a) By using expenditure approach, calculate Gross Domestic Product (GDP) at market price. b) By using income approach, calculate Gross Domestic Product 9GDP) at market price. c) Based on your understanding on Gross Domestic Product (GDP), explain why do you think that GDP Ís important, and what is the limitation of GDP?
Question 22 Table 2.1 GDP and its components, 2012 Source: Bureau of Economic Analysis. Table 1.1.5, Note:Numbers may not add up to the totals due to rounding. Personal consumption expenditure (C) Consumer durables Nondurable goods Services Investment (1) Fixed investment Inventory investment Residential investment Government purchases (G) Federal State and local Net exports (NX) Exports Minus imports Total = GDP (Y) www.bea.gownational/nipaweb/SelectTable.asp?Selected=Y Billions of Dollars 11,286 1,231 2,595 7,459 2,500 2,018 13 469 3,151 1,275 1,875 -516 2,214 2,730 16,420 Percent of GDP 68.7 7.5 15.8 45.4 15.2 12.3 0.14 2.9 19.2 7.8 11.4 -3.1 13.5 16.6 100.0 Assuming that the GDP breakdown shown in Table 2.1 is typical of a given year in the U.S. we can say that government purchases is the largest main component of GDP consumption of durable goods is twice that of nondurables we spend twice as much on goods consumption as we do on services all of the above none of the above
Question 2 - Computation and Short Answer (a) Calculate GDP using the Income and Expenditure Approach. (all figures are in billions of dollars):Item Amount ($)Government purchase of goods and services 1,721.6Exports 1,096.3Receipts of factor income from the rest of the world 382.7Depreciation (consumption of fixed capital) 990.8Net fixed Investments 688.2Corporate income taxes 265.2Consumption expenditures 6,739.4Indirect business taxes 664.6Imports 1,475.8Payments of factor income to the rest of the world 343.7Inventory change 56.5Social security contributions 702.7Undistributed corporate profits (retained earnings) 130.3Government transfer and interest payments 1,366.3Personal interest payments 286.2Personal taxes 1,235.7
The calculation of a country's GDP encompasses all private and public consumption, government outlays, investments, additions to private inventories, paid-in construction costs, and the foreign balance of trade. (Exports are added to the value and imports are subtracted). Explain how each of the following items are treated in the computation of GDP for 2020. Interest on treasury issued by the Bank of Ghana Social security payments paid to retired employees in Ghana You assisted your parents to weed your family backyard The property income received by a hauler The money received by Martha when she sold her mother’s old blender The monthly allowance a student receives from scholarship secretariat The money received by Matthew Amoako when he bought Afia’s laptop The value of working in progress is $2 billion Asamoah withdraw GHC 5m from his bank accounts to purchase of 1000 shares of GCB Bank stock To protect his employees from the risk of contracting the COVID 19, the…
The calculation of a country's GDP encompasses all private and public consumption, government outlays, investments, additions to private inventories, paid-in construction costs, and the foreign balance of trade. (Exports are added to the value and imports are subtracted). Explain how each of the following items are treated in the computation of GDP for 2020. Interest on treasury issued by the Bank of Ghana? Social security payments paid to retired employees in Ghana? You assisted your parents to weed your family backyard? The property income received by a hauler? The money received by Martha when she sold her mother’s old blender? The monthly allowance a student receives from scholarship secretariat? The money received by Matthew Amoako when he bought Afia’s laptop? The value of working in progress is $2 billion? Asamoah withdraw GHC 5m from his bank accounts to purchase of 1000 shares of GCB Bank stock To protect his employees from the risk of contracting the COVID 19, the president…
4. Measuring GDP The following table shows data on consumption, investments, exports, imports, and government expenditures for the United States in 2020, as published by the Bureau of Economic Analysis. All figures are in billions of dollars. Fill in the missing cells in the table to calculate GDP using the expenditure approach. Consumption (C) Investment (I) Exports (X) Imports (M) Net Exports of Goods and Services Government Purchases (G) Gross Domestic Product (GDP) Data (Billions of dollars) 14,047.6 3,637.8 2,123.4 2,774.6 3,859.5
Determine if the following would be included (I) or excluded (E) from the calculation of GDP. (d) An increase in business inventories _______ (e) The income of a tax accountant working for a business _______ (f) Income received from interest on a corporate bond ________ (g) Business expenditures on pollution control equipment ______ (h) Dr. Jung grows tomatoes in his backyard for home consumption _______
Question 2 (i) Explain the difference between Gross Domestic Product (GDP) and Gross National Income. (ii) Explain the difference between Gross Domestic Product at factor cost (basic prices) and Gross Domestic Product at market prices. (iii)Explain the difference between nominal Gross Domestic Product and real Gross Domestic Product over time and the role of the GDP deflator.
Question 1: For each of the activities listed below, determine if it should be included in calculating the 2022 Canadian GDP using the expenditure approach by selecting INCLUDED or NOT INCLUDED and the corresponding reason. Activity Included/Not included Reason A Bombardier jet made in Quebec and sold to Martinique in 2022. A house built in Toronto in 2021 but not sold until 2022. A new federal courthouse built in Calgary in 2022. A fine chocolate bar produced in Denmark and sold in Vancouver in 2022. A case of whiskey produced in Ontario in 2022 and sold to someone in Spain in 2023. A newly planted wheat farm in Manitoba in 2022. A resident of New Brunswick pays her property taxes in 2022. A performance by a Japanese acrobatic dance company in Edmonton in 2022. Payment by a resident of Montreal to their neighbor's daughter for five hours of dog-sitting service in 2022. . Purchase of 100 shares of…
I. Imports are flows of payments to domestic households from foreign firms in exchange for goods and services II. Exports are flows of payments to domestic firms from foreign households in exchange for goods and services III. Imports are added to the GDP computation to account for goods and services produced by other economies but included in consumption, investment, or government spending IV. Exports are deducted from the GDP computation to account for goods and services produced by the economy but not included in consumption, investment, or government spending O All Statements are false Only Statement I is false Only Statement II is true O Only Statement II is false All Statements are true
Gross domestic product (GDP) is a key measure of the national economy. a) Define GDP and describe three ways of calculating the size of GDP in an economy
Question 3 (i) Calculate the value added at each stage of production (ii) Calculate the contribution to GDP from the good