. If a U.S. citizen buys a coat made in China, the a.U.S. consumption increases and U.S. net exports decrease, thus, U.S. GDP decreases.b.U.S. consumption increases and U.S. net exports decrease, thus, U.S. GDP is unaffected.c.U.S. consumption decreases and U.S. net exports increase, thus, U.S. GDP increases.d.U.S. consumption decreases and U.S. net exports increase, thus, U.S. GDP is unaffected.

Gross domestic product (GDP): - GDP is the market value of all final goods and services produced in…

Answered: If a U.S. citizen buys a coat made in…

Principles of Macroeconomics (MindTap Course List)

7th Edition

ISBN:9781285165912

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter18: Open-Economy Macroeconomics: Basic Concepts

Section: Chapter Questions

Problem 3QCMC

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What is the relative importance of Net Export (NX) (Net Export = spending on exports (X) - imports (M)) in aggreagte demand and some factors that affect it?
2. An American purchases a case of Jaffa Cakes which are produced in the UnitedKingdom. How do the U.S. national accounts treat the transaction?a. Net exports and GDP both decreaseb. Net exports fall and GDP does not changec. CPI and GDP both decreased. CPI increases and net exports do not change
What is a foreign exchange rate? (a) The rate at which the currency of one country trades for the goods ofanother country.(b) The rate at which one country’s goods trade for those of another country.(c) The rate at which currencies of different countries are exchanged.(d) The rate at which one country’s currency trades for gold provided byanother country. Induced consumption is: (a) the part of consumption which is independent of the level of income.(b) the minimum level of consumption that is financed from sources other than income.(c) The maximum level of consumption that is financed from sources other than income.(d) shown by the slope of the consumption function. In the Keynesian model, an introduction of a proportional tax will: (a) increase the slope of the consumption function.(b) reduce the multiplier.(c) increase the equilibrium level of income.(d) increase the multiplier. A decrease in the price level will: (a) shift the AS curve to the left.(b) shift the AD curve to the…
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Consider the following table showing the breakdown of GDP (in billions) for China. GDP Category Amount (in billions) Wages and Salaries 1000Consumption 1700Investment 700Depreciation 50Government Expenditure100Taxes 300Exports 50Imports 40Income receipts from rest of the world10Income payment to rest of the world50 What are net exports for China? 4. Suppose that GDP in Japan is 1030 and then grows to 1160 (all numbers in billions)What is the growth rate of GDP in Japan?Use the following information to answer questions 5 through 15: The tables below show data on prices and quantities of Oranges and Shoes produced in China. Data for 2014Price of Oranges Quantity of Oranges Price of Shoes Quantity of Shoes0.7 200 10 270Data for 2015Price of Oranges Quantity of Oranges Price of Shoes Quantity of Shoes0.9 150 14 250Data for 2016Price of Oranges Quantity of Oranges Price of Shoes Quantity of Shoes1.4 300 15 3305. Given this data, what is the Nominal GDP in 2014?6. What is the Nominal GDP in…
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For this problem, assume exports equal zero and that firms did not purchase any plant or equipment in the years specified. Suppose in the year 2015, firms in this this country produced 4,000 million widgets, all of which they planned on selling. (In other words, firms were not planning on any changes to their inventories.) Of those 4,000 million widgets, households purchased 3,000 million, and government purchased 750 million. In 2015, what were firm’s planned investments equal to? In 2015, what were firm’s actual investments equal to? (explain). In 2015, what was the relationship between planned expenditures and actual expenditures? (Explain and use numbers) In 2015, what was the relationship between actual expenditures and the amount of output (widgets) produced? All else equal, what will firms likely do in the following year?
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a.	U.S. consumption increases and U.S. net exports decrease, thus, U.S. GDP decreases.
b.	U.S. consumption increases and U.S. net exports decrease, thus, U.S. GDP is unaffected.
c.	U.S. consumption decreases and U.S. net exports increase, thus, U.S. GDP increases.
d.	U.S. consumption decreases and U.S. net exports increase, thus, U.S. GDP is unaffected.