Determine if the following items enter the GDP calculation, and briefly explain WHy. (Hthe factors of production) or expenditure. Chapter 10 discusses what is not included in the GDP calculations).a. Increase in the participation of women in the U.S. labor force since 1970.b. There is a decrease in number of stay-home parents due to a decrease in fertility rates.c. People go out more often and amounts of food consumed and produced at home decreases.d. Spending by the government on transfer payments such as Social Security or food stamps.e. Market value of steel parts used to produce vehicles by the Ford company, if the value of production of all automobiles in the country areaccounted for in the GDP already.

Answered: Determine if the following items enter…

Economics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506725

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 14CQ

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Determine if the following items enter the GDP calculation, and briefly explain WHy. (H
the factors of production) or expenditure. Chapter 10 discusses what is not included in the GDP calculations).
a. Increase in the participation of women in the U.S. labor force since 1970.
b. There is a decrease in number of stay-home parents due to a decrease in fertility rates.
c. People go out more often and amounts of food consumed and produced at home decreases.
d. Spending by the government on transfer payments such as Social Security or food stamps.
e. Market value of steel parts used to produce vehicles by the Ford company, if the value of production of all automobiles in the country are
accounted for in the GDP already.

Expert Solution

Step 1

a) Increase of women in labour force participation would mean that higher number is women are taking up jobs. Since these are marketed jobs ie not for self consumption, in other words they are providing services for salary and wages, this would contribute to GDP.

b) A decrease in stay at home parents means that more of them are taking up jobs and are not at home taking care of children, which was not included in GDP. But since they are taking up jobs, they would contribute to GDP and hence included in GDP calculation.

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