20 The GDP gap eares (a) ominal GDP esceeds real GDP. potential GDP esceeds actual GDP. (d) actual GDP eeeds national income h atual GDP excreds potential GDP.
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- The equation total production= total income = total expenditure is called A- the goods-market equilibrium condition B- the total identity C- the fundamental identity of national income accounting D- Say’s law3. (National Income Accounting) Explain why intermediate goods and services usually are not included directly in GDP. Are there any circumstances under which they would be included directly? 4. (Nominal GDP) Which of the following is a necessary condition —something that must occur—for nominal GDP to rise? Explain your answers. a. Actual production must increase. b. The price level must increase. c. Real GDP must increase. d. Both the price level and actual production must increase. e. Either the price level or real GDP must increase 5. (Price Indexes) E-readers and HDTVs have not been part of the U.S. economy for very long. Both goods have been decreasing in price and improving in quality. What problems does this pose for people who are responsible for calculating a price index? 6. (Consumer Price Index) One form of the CPI that has been advocated by lobbying groups is a “CPI for the elderly.” The Bureau of Labor Statistics currently produces only indexes for “all urban…4. Compute the percentage increase in real GDP from 2004 to 2005.a. 0 percentb. 7 percentc. 22 percentd. 27 percent *base year is 2003
- Set 7 advantage of GDP as a measure of welfare with explanationsQUESTION 1 a. What is the main difference between Gross Domestic Product (GDP) and Gross National Product (GNP)? b. Critically state the difference between the expenditure approach to measuring GDP, the output approach, and the income approach? c. Differentiate between unemployment and underemployment. d. Explain ONE type of unemployment. e. Explain three (3) costs of unemployment to society. QUESTION 2 a. Explain concisely whether the following statement is true or false: “The GDP of a country does provide an accurate indicator of the welfare of its citizens” b. In as much detail as possible, explain the Circular Flow Diagram for a Four (4) sector economy.4. A country in which a large majority of the population resides and works outside the country is most likely a country in which...? a. the relationship between GDP and GNP cannot be determined b. GDP is roughly equal to GNP. c. GDP is much larger than GNP. d. GNP is much larger than GDP. 5. As the workforce ages, a. structural and frictional unemployment increase. b. cyclical unemployment declines. c. cyclical unemployment increases. d. the natural rate of unemployment declines.
- 4. A measure of the degree to which capital wears out or becomes obsolete during a period is: A) rent. B) production costs. C) deferred expenditure. D) depreciation. 5. Which of the following would not be included in the measurement of GDP? A) federal government payments for Jeeps B) a purchase of California wine by a Canadian firm C) employers' payments for employees' medical insurance D) transactions in the underground economy 6. Aggregate demand is the total value of real GDP that A) all sectors of the economy are willing to purchase at various average price levels, all other things unchanged. B) all sectors of the economy are willing to sell at various average price levels, all other things unchanged. C) consumers are willing to purchase at various average price levels, all other things unchanged. D) consumers are willing to purchase…1- The four expenditure categories of GDP consist on consumption, government purchases, investment, net-exports. Select one: a. True b. False 2- GDP doesn’t include value of almost all activity that is takes place outside markets. Select one: a. False b. TrueThe economy of Fantasia produces only 2 goods namely Shoes and Computers. The total productionand average prices of shoes and computers are displayed in Table 2 attached. (a) Compute the nominal GDP of Fantasia for 2019 and 2020 (hint: calculate the total value ofproduction in each year) (b) Compute the real GDP of Fantasia in 2020 using 2019 prices
- 1- Khalid steel company sells steel worth OMR 45,500 to a desert driven bike manufacturer, National company. The sales of National company reaches OMR 73,800. So, the contribution to GDP is ________________ Select one: a. OMR 45500 b. OMR 28300 c. OMR 73800 d. OMR 119,300 2- One of the components of GDP government consumption expenditure and gross investment based by local, state, and federal governments. Select one: a. False b. TrueOn the demand side of GDP, consumption by _____________ is the largest component of GDP, accounting for about two-thirds of the GDP in any year. options a) businesses b) households c) services d) governmentShortcomings of GDP alone 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: 1. Explain the merits, and why we would expect to see a correlation between GDP and wellbeing.