a. The popularly known sum "C+l+G" cannot be a measure of GDP. Explain. [Hint: To make the formula GDP=C+l+G work, the statisticians include in their measure of investment (I) an item called, "changes in inventories", which equal production minus expenditure.]

a. The popularly known sum "C+l+G" cannot be a measure of GDP. Explain. [Hint: To make the formula GDP=C+l+G work, the statisticians include in their measure of investment (I) an item called, "changes in inventories", which equal production minus expenditure.]

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter19: The Macroeconomic Perspective

Section: Chapter Questions

Problem 28P: Last year, a small nation with abundant forests cut down 200 worth of trees. It then turned 100...

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Question

a. The popularly known sum “C+l+G" cannot be
a measure of GDP. Explain.
[Hint: To make the formula
GDP=C+l+G work, the statisticians
include in their measure of
investment (I) an item called,
"changes in inventories", which
equal production minus
expenditure.]

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