Part C please. 2) Part A: Why must double counting be avoided when measuring GDP? Provide an elaborate answer with at least one example.Part B: Aggregate Demand (AD) Curve shows the relationship between the economy's price level and real GDP demanded. In other words, real GDP demanded bydifferent groups of buyers, i.e., Consumers (C), Businesses (1), Government (G), and Net Amount by Foreigners (Export - Import), at different price levels give us pointson a graph, which are connected to form a curve called AD curve. Review the textbook chapter, and conduct internet research to discuss determinants of AD or factorsthat shift AD curve.Part C: Following graph shows business cycle fluctuation in a hypothetical economy. "Y" denotes year, and "Q" denotes quarter. What do points A, B, C, andD denote?Write at least a sentence each about what these points denote. Also, explain what represent the curve segments: A to B, B to C, and C to D. Lastly, because economicactivity fluctuates, how is long-term growth possible?Real GDP (billion $)504540B353025201510Y1Q1 Y1Q2 Y103 Y1Q4 Y2 Q1 Y2 Q2 Y2 Q4 Y3 Q1 Y3 Q2

Business Cycle refers to the fluctuations in economic output and employment. The business cycle…

Answered: Part C please.

Business

Economics

Part C please.

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter6: Tracking The U.s. Economy

Section: Chapter Questions

Problem 3.7P

See similar textbooks

Similar questions

Question 1a) Give the definition of GDP and explain what items are not included in its calculation?b) How is GDP calculated using the expenditure approach?c) How is GDP calculated using the income approach?d) Research the concept of measuring GDP using the value added approach and provide aworking definition?e) Explain the problem of "double-counting" and how it can be avoided in calculating GDP.
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. True
10 In the expenditure approach, the total expenditures of the following entities are calculated, except a. Gross taxable incomes b. Gross private domestic investment c. Government expenditures d. Net Exports
Question 5: Suppose you recently received the GDP numbers for the last quarter. When you calculated the change from the previous quarter, you observed the following: observed the following changes: Y ——> +1.5% C ——> +0.1% I ——> +3% G ——> +0.2% NX ——> unchanged How would you interpret each value in context with the whole of GDP? Is there anything in the data that is predictive (potentially) of future conditions?
1. Which of the following would not give us a measure of GDP?a) The aggregate value of all incomes received from participation in the economyb) The aggregate value of purchases of goods and services produced within the economy.c) The value added in production of goods and services in the economy.d) The value of all sales of goods and services in the economy. 2. Suppose that over the last three years, there has been a 10% increase in real GDP, but a 5% increase in nominal GDP, we might conclude thata) The economy has entered a recession.b) The price level has increased, with 5% inflation.c) The price level has decreased, with 5% deflation.d) The economy has experienced a combination of low growth and inflation. 3. In a simple closed economy, consumption is given by the relationship C=0.5Y, where C is consumption expenditure and Y is GDP. If government expenditure is £150 million and investment is £50 million, what will be the value of GDP of the economy?a) £200 millionb) £300 millionc)…
Question 2: Fill in the blanks. The three different approaches to measuring the GDP are the expenditure approach, the approach, and the approach. The expenditure approach aggregates the spending by the four sectors of the economy: (a) the household sector, (b) the sector, (c) the sector, and (d) the foreign sector, to yield the total GDP. The largest spending in Canada’s aggregate GDP comes from the sector. When using the income approach, the first step is to calculate the total national income by adding employee compensation, proprietor’s income, , net interest, and rental income. There are six categories of economic exchanges that are omitted from GDP calculations. One such category is government transfer payments (like unemployment insurance payment), because it represents transfers of income without new production. Another category is , because because they are unpaid and not…
3. (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…
Question 7 The expenditures approach to GDP equals a) Consumption + Gross Investment + Government Purchases + Net Exports. b) Employee Compensation + Profit + Net Property Income + Indirect Business Taxes + Depreciation - Income Earned Abroad. c) Consumption + Net Investment (Gross Investment-Depreciation) + Government Purchases + Net Exports. d) Employee Compensation - Profit - Net Property Income - Indirect Business Taxes-Depreciation - Income Earned Abroad.
31. What are three methods of calculating GDP. Do they end up with the same number? Please elaborate 32. What are intermediate goods? Why do economists exclude the value of intermediate goods while calculating national income? 33. Compare and contrast the U.S. economic record prior to 1940 and after 1950. How do the two time periods differ? What best explains the differences according to a macroeconomist? 34. Why do price levels increase when government adopts fiscal or monetary policy to correct the economy when it faces a recession and high unemployment? 35. Are there key differences between an increase in the capital stock and an improvement in the level of technology? 36. Describe how the labor force, the nation's capital stock, and the rate of technical progress contribute to potential GDP growth and labor productivity. 37. High unemployment is socially wasteful. Why?
22 - Which of the following does GDP measure? a) Non-market economic activities B) Economic transactions in the market C) Illegal economic activities D) informal economy TO) Quality of goods and services
Question 5: Suppose you recently received the GDP numbers for the last quarter. When you calculated the change from the previous quarter, you observed the following: observed the following changes: Y ——> +1.5% C ——> +0.1% I ——> +3% G ——> +0.2% NX ——> unchanged How would you interpret each value in context with the whole of GDP? Is there anything in the data that is predictive (potentially) of future conditions? Question 6: You have a business that manufactures circuit boards for mobile phones. Suppose you received the GDP numbers for the quarter after those in problem 5: Y ——> +0.3% C ——> -2% I ——> +2.5% G ——> +0.2% NX ——> unchanged a. Using the data from both quarters (prob 5 and prob above), what do you expect is happening in the economy and what might this mean for your business? Explain why you came to this conclusion. b. What does this portend for the future of the economy (if anything) and how might you position your business given your…
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