Answered: Although GDP is a reasonably good…

Macroeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506756

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter7: Taking The Nation's Economic Pulse

Section: Chapter Questions

Problem 15CQ

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Although GDP is a reasonably good measure of a nation's output, it does not necessarily include all transactions and production for that nation.

Which of the following scenarios are either not accounted for or measured inaccurately by either the income or the expenditure methods of calculating GDP for the United States? Check all that apply.

a. The variety of goods available to consumers

b. The costs of air and water pollution

c. Expenditures on federal highways

d. The value of babysitting services, when the babysitter is paid in cash and the transaction isn't reported to the government

When a U.S. company purchases and imports electronic parts from China to use to produce MP3 players within the United States, this purchase increases the (a. government purchases, b. investment, c. consumption) component of GDP while also (a. increasing, b. decreasing) net exports by the same amount. Therefore, the purchase of electronic parts from China causes (a. no change, b. an increase, c. a decrease) in US GDP.

Although GDP is a reasonably good measure of a nation's output, it does not necessarily include all transactions and production for that nation.
Which of the following scenarios are either not accounted for or measured inaccurately by either the income or the expenditure methods of calculating
GDP for the United States? Check all that apply.
The variety of goods available to consumers
The costs of air and water pollution
Expenditures on federal highways
The value of babysitting services, when the babysitter is paid in cash and the transaction isn't reported to the government
When a U.S. company purchases and imports electronic parts from China to use to produce MP3 players within the United States, this purchase
increases the
component of GDP while also
net exports by the same amount. Therefore, the
purchase of electronic parts from China causes
in US GDP.

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