Macroeconomics (Fourth Edition)
4th Edition
ISBN: 9780393603767
Author: Charles I. Jones
Publisher: W. W. Norton & Company
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Question
Chapter 2, Problem 9E
(a)
To determine
Explain the economic well-being of the people.
(b)
To determine
Explain the economy’s measured
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You are discussing economic growth and the economic cycle with a group of colleagues in an effort to forecast the growth in an economy that is demonstrating an increase in investment, rising employment, and growing business confidence with slowly rising prices. Your discussion has encompassed the distinction between GDP and GNP and the importance of leading indicators for forecasting purposes. Based on this information, answer the following three questions. In national income accounting, what is the difference between gross domestic product (GDP) and gross national product (GNP)?
GNP equals GDP plus domestic production/earnings by foreign companies/citizens ,minus foreign production/earnings by domestic companies/citizens
GNP equals GDP plus foreign production/earnings by domestic companies/citizens, minus domestic production/earnings by foreign companies/citizens GNP equals GDP plus imports minus exports GNP equals GDP minus government spending minus exports plus imports.
The GDP deflator measures
A .the changes in aggregate prices of all final goods and services produced within a country’s borders within a certain time period and incorporates the relevant parts of the CPI and PPI statistics.
B. the inflation rate based on consumer cost of living over time, turning dollar figures into meaningful measures of purchasing power.
C. the inflation rate based on the producer price index, turning dollar figures into meaningful measures of purchasing power.
D. the inflation rate of both exports and imports over time, turning dollar figures into meaningful measures of purchasing power.
PART I -- GDP is the most often cited measure of how our economy is doing. The U.S. Bureau of Economic Analysis reports U.S. Real GDP quarterly. Based on estimates of Q1 data, (actual Q1 data not released until April 27), how did the U.S. economy do in the first quarter?
PART II -- CPI -- an equally important economic indicator -- is reported monthly and the U.S. Department of Labor Bureau of Labor Statistics. Released recently. What did that report tell us?.
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- Select all events that contribute to increase the current year’s GDP in Canada? A household purchases lumbers produced during the current year to renovate his house. The government purchases meals in a restaurant for its ministers. A household purchases a newly built house. The government builds a new road. An individual gets a haircut. None of the above.arrow_forwardMeasure GDP and NDP from the following data: Consumption Expenditure $ 28,500 Government Expenditure $ 18,900 Investment Expenditure $ 16,800 Exports $ 9.640 Imports $ 8,750 Depreciations $ 1,340 Retained Earnings $ 1,150 Indirect Business Taxes $ 950arrow_forwardSuppose the economy of Ausland's spending for the year can be described by the table below: Household Consumption $450 Government Spending on Transfer Payments $80 Imports $50 Government Spending on Public Goods and Services $200 Business Purchases of New Capital Goods $120 Net Exports $150 Government Tax Revenue $95 Sale of Existing Houses $115 What is the value of Gross Domestic Product (GDP) for Ausland? Select one: a. $1115 b. $870 c. $920 d. $1000arrow_forward
- Select all events that contribute to increase the current year’s GDP in Canada? An apple producer sells apples to an household. The government purchases newly produced books for the public schools. A firm produces a kitchen table but cannot sell it during the current year. A household purchases a newly built house. A household purchases an old house using the service of a real estate agent. None of the above.arrow_forwardQuestion 15 Gross domestic product (GDP) in the economy is measured by the: market value of all final goods and services produced in the economy. total number of goods produced in the economy. total number of goods and services produced in the economy. total number of services produced in the economy.arrow_forwardThe gross domestic product (GDP) of the United States is defined as the _________ (options: cost of producing, market value of, wholesale cost of) all _______________ (options: final and intermediate goods and services produced, final goods and services produced, final goods and services consumed) by _________________ (options: U.S. citizens, U.S.-owned companies, resources within the United States) in a given period of time, usually a year.arrow_forward
- From the data below find the measure of GDP. Personal Consumption Expenditures 50 Depreciation 3 Indirect Business Taxes less Subsidies 1 Gross Private Domestic Investment 20 Exports 12 Government Purchases of Goods and Services 15 Government Transfer Payments 4 Imports 10arrow_forwardReal GDPa. is the current dollar value of all goods produced by the citizens of an economy within a given time.b. measures economic activity and income.c. is used primarily to measure long-run changes rather than short-run fluctuations.d. All of the above are correct.arrow_forwardQuestion 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…arrow_forward
- BMW, a German owned company produces some of its cars (Mini Coopers) in South Carolina. In 2018 BMW made $32 million revenue from sales to Americans, $5 million from sales to Greeks and $4 million worth of automobiles added to BMW’s inventory. How much of these contribute to the US GDP for 2018? Group of answer choices $36 million. $41 million $37 million $28 millionarrow_forwardGross Domestic Product Use the data chart to answer the questions below. Consumption $500 Government Expenditures $200 GNP $800 Gross Private Domestic Investment $100 Imports $100 Exports $50 Questions: Using the data above, GDP is equal to __________________. Using the data above, Net Exports is equal to _____________. Using the data above, PCE (Personal Consumption Expenditure) is equal to _____________. If the dollar amounts of the items above are the nominal amounts in year 2017, and the quantities of units are identical in years 2010 and 2017, but prices in 2010 were 20% less than 2017, Real GDP in 2017 using 2010 as the base year is equal to _______________.arrow_forward
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