Economics, Student Value Edition (6th Edition)
6th Edition
ISBN: 9780134123851
Author: Hubbard, R. Glenn; O'Brien, Anthony Patrick
Publisher: PEARSON
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Question
Chapter 23, Problem 23.3.7PA
To determine
The relationship between the net export and real GDP .
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The table below shows hypothetical values of the expenditure components for the United States in 2016.
Expenditure Component Amount of Expenditure (billions of dollars)
Durable goods $1,269.30
Nondurable goods 2,638.30
Services 7,763.00
Gross investment 2,682.40
Exports 2,302.90
Imports 2,803.60
Federal government 1,250.00
State and local government…
im having a little toruble with the following question and answer:
The Commerce Department reported that retail sales increased 1.3 percent in June. Net exports were up 0.8 percent in the first quarter and inventories held by businesses rose by 0.3 percent in June. Total sales by businesses rose 0.3 percent.
Source: Commerce Department, 2013
Does the statement that total sales by businesses were up 0.3 percent mean that GDP increased by 0.3 percent?
The statement that total sales by businesses were up 0.3 percent means that GDP ______ because ______.
A.
did not change by 0.3 percent;
GDP measures production of all final goods and services and "total sales by businesses" includes final and intermediate goods and services
B.
increased by 0.3 percent;
GDP is a record of the value of all production
C.
decreased by 0.3 percent;
"total sales by businesses" are sales of intermediate goods and services
D.
increased by less than 0.3 percent;…
Suppose the following table shows the components of aggregate expenditure for an economy when disposable income is $200 billion and when it is $400 billion:
Disposable Income
$200 billion
$400 billion
Consumption
$300 billion
$400 billion
Investment
$100 billion
$100 billion
Government Purchases
$175 billion
$175 billion
Net Exports
$200 billion
$180 billion
Aggregate Expenditure
$775 billion
$855 billion
On the following graph, use the blue curve to plot government purchases as a function of disposable income:
Chapter 23 Solutions
Economics, Student Value Edition (6th Edition)
Ch. 23.A - Prob. 1RQCh. 23.A - Prob. 2RQCh. 23.A - Prob. 3RQCh. 23.A - Prob. 4RQCh. 23 - Prob. 23.1.1RQCh. 23 - Prob. 23.1.2RQCh. 23 - Prob. 23.1.3RQCh. 23 - Prob. 23.1.4PACh. 23 - Prob. 23.1.5PACh. 23 - Prob. 23.1.6PA
Ch. 23 - Prob. 23.1.7PACh. 23 - Prob. 23.1.8PACh. 23 - Prob. 23.1.9PACh. 23 - Prob. 23.2.1RQCh. 23 - Prob. 23.2.2RQCh. 23 - Prob. 23.2.3RQCh. 23 - Prob. 23.2.4RQCh. 23 - Prob. 23.2.5RQCh. 23 - Prob. 23.2.6PACh. 23 - Prob. 23.2.7PACh. 23 - Prob. 23.2.8PACh. 23 - Prob. 23.2.9PACh. 23 - Prob. 23.2.10PACh. 23 - Prob. 23.2.11PACh. 23 - Prob. 23.2.12PACh. 23 - Prob. 23.2.13PACh. 23 - Prob. 23.2.14PACh. 23 - Prob. 23.3.1RQCh. 23 - Prob. 23.3.2RQCh. 23 - Prob. 23.3.3RQCh. 23 - Prob. 23.3.4RQCh. 23 - Prob. 23.3.5RQCh. 23 - Prob. 23.3.6PACh. 23 - Prob. 23.3.7PACh. 23 - Prob. 23.3.8PACh. 23 - Prob. 23.3.9PACh. 23 - Prob. 23.3.10PACh. 23 - Prob. 23.3.11PACh. 23 - Prob. 23.3.12PACh. 23 - Prob. 23.4.1RQCh. 23 - Prob. 23.4.2RQCh. 23 - Prob. 23.4.3RQCh. 23 - Prob. 23.4.4PACh. 23 - Prob. 23.4.5PACh. 23 - Prob. 23.4.6PACh. 23 - Prob. 23.4.7PACh. 23 - Prob. 23.4.8PACh. 23 - Prob. 23.4.9PACh. 23 - Prob. 23.4.10PACh. 23 - Prob. 23.4.11PACh. 23 - Prob. 23.4.12PACh. 23 - Prob. 23.4.13PACh. 23 - Prob. 23.5.1RQCh. 23 - Prob. 23.5.2RQCh. 23 - Prob. 23.5.3RQCh. 23 - Prob. 23.5.4PACh. 23 - Prob. 23.5.5PACh. 23 - Prob. 23.5.6PACh. 23 - Prob. 23.1RDE
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- Explain briefly whether each of the following would cause GDP to overstate or understate the degree of change in the broad standard of living. The environment becomes dirtier The crime rate declines A greater variety of goods become available to consumers Infant mortality declinesarrow_forwardCalculate the four components of aggregate expenditure and GDP for the following economy using data from the table below.Instructions: Enter your responses as whole numbers. If you are entering any negative numbers, be sure to include a negative (-) sign in front of those numbers. GDP Consumption expenditures $600 Exports $75 Government purchases of goods and services $200 Construction of new homes and apartments $100 Sales of existing homes and apartments $200 Imports $100 Beginning-of-year inventory stocks $100 End-of-year inventory stocks $150 Business fixed investment $100 Government payments to retirees $100 Household purchases of durable goods $150 Consumption expenditures: $ Investment expenditures: $ Government Purchases: $ Net Exports: $ GDP: $arrow_forwardThe table below details the composition of an economy’s GDP by spending category. Category Expenditures (billions of dollars) Fixed business investment $3,550.00 Durable goods $2,600.00 Exports $600.00 Federal government purchases $1,250.00 New home construction $1,000.00 Imports $720.00 Change in inventories $-300.00 Nondurable goods $4,400.00 Services $9,350.00 State and local government purchases $2,150.00 Use the information in the table to calculate the following:a) Consumption: $ billionb) Investment: $ billionc) Government: $ billiond) Net exports: $ billione) GDP: $ billion Part 2 Think about the different components of GDP and how they change with the business cycle. Which component of consumption fluctuates the most?Choose one:A. nondurable goodsB. durable goodsC. new home constructionD. services Part 3 Consider the net exports component of GDP. Suppose exports increase by $100 billion and…arrow_forward
- The following table shows data on consumption, investments, exports, imports, and government expenditures for the United States in 2014, as published by the Bureau of Economic Analysis. All figures are in billions of dollars. Fill in the missing cells in the table to calculate GDP using the expenditure approach. Data (Billions of dollars) Consumption (C) 11,930.3 Investment (I) 2,851.6 Exports (X) 2,337.0 Imports (M) 2,875.2 Net Exports of Goods and Services Government Purchases (G) 3,175.2 Gross Domestic Product (GDP)arrow_forwardWhat is on the axes of an expenditure-output diagram?arrow_forward
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