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Nt1310 Unit 3 Assignment

Satisfactory Essays

1. Gross domestic product, GDP, is the sum of consumption, investments, government purchases, and net exports. Consumption includes services, nondurable goods, and durable goods. According to the article, “No Let-up Seen In Rent Hikes This Year,” services would increase because there would be an increase in demand for real estate agents as more people look for housing. Because “many young adults are also putting off getting married and having kids,” nondurable goods would most likely remain at the same value as there would not be a dramatic increase in population and in demand for nondurable goods. Durable goods, such as furniture, would increase as more people move into new apartments that need to be furnished. In the category of investments, …show more content…

Since more apartments are being built, there is a greater demand for the machinery used to produce them that will cause investments to increase. Since more people are looking to buy new apartments, residential investments will increase and will also lead to an increase in investments. In the category of government purchases, there would not be any dramatic changes according to the two articles because there is no mention that the government will dramatically change any of its spending habits. Net exports include exports and imports of the United States. This category of GDP will increase as well as more goods and services from the United States and foreign countries are demanded in order for constructors to keep up with the increasing demand for apartments. As a result of the increase in consumption, investments and net exports, the total GDP in the next year should increase. This will cause an increase in real GDP because the prices of the base year will remain the same as there is an expected increase in quantity of apartments in the next year. This will also cause an increase in nominal GDP because there will be an increase in prices of the apartments in the next year as the quantity and demand for

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