EP ECONOMICS,AP EDITION-CONNECT ACCESS
20th Edition
ISBN: 9780021403455
Author: McConnell
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Question
Chapter 24, Problem 3RQ
To determine
Economics real GDP.
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Students have asked these similar questions
4. Below is a list of domestic output and national income figures for
a certain year. All figures are in billions. The questions that follow
ask you to determine the major national income measures by both
the expenditures and income approaches. The results you obtain
with the different methods should be the same. LO7.4
Personal consumption expenditures
$245
7.
Net foreign factor income
4
Transfer payments
12
Rents
14
Consumption of fixed capital (depreciation)
27
Statistical discrepancy
8.
Social Security contributions
20
Interest
13
Proprietors' income
33
Net exports
11
Dividends
16
Compensation of employees
223
Taxes on production and imports
18
Undistributed corporate profits
21
Personal taxes
26
19
Corporate income taxes
56
Corporate profits
72
Government purchases
33
Net private domestic investment
20
Personal saving
a. Using the above data, determine GDP by both the expenditures
approach and the income approach. Then determine NDP.
b. Now determine NI in two ways: first, by…
Production
Prices
Year1 Year 2 Year 3
Year 1 Year 2 Year
Good X 50
50
60
$1.00 $1.20 $1.20
Good Y
100 120 140
$0.60 $0.60 $1.00
Assume that this economy produces only two goods Good X and Good Y. If year 1 is the base year, the value
for this economy's GDP deflator in year 2 is
Select one:
O a. 92.4
O b. 105
O . 84.5
O d. 108.2
Consider a closed economy (no trade) where:
C = 400+0.8YD
lo = 1600
Go = 2200
NT = 0.2Y
a. Calculate Y*.
b. If Yp=10,000, is there an inflationary or recessionary gap?
c. Calculate the change in government expenditure (G) necessary to move the
economy back to its potential.
Chapter 24 Solutions
EP ECONOMICS,AP EDITION-CONNECT ACCESS
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- Suppose the information in the following table is for a simple economy that produces only the following four goods: shoes, hamburgers, shirts, and cotton. Further, assume that all of the cotton is used to produce shirts. Product Shoes Hamburgers Shirts Cotton 2009, then the nominal GDP for 2017 equals: O 18672.5 O 8250 O8750 2009 Statistics Quantity 100 85 60 11,000 O 10422.5 Price $52.00 3.00 35.00 0.85 2016 Statistics Quantity 115 120 55 10,000 Price $65.00 3.00 30.00 0.70 2017 Statistics Quantity 110 135 75 11,000 Price $70.00 3.50 30.00 0.75 If the base year is the yeararrow_forwardLAST WORD What is Say's law? How does it relate to the view held by classical economists that the economy generally will operate at a position on its production possibilities curve? Use production possibilities analysis to demonstrate Keynes's view on this matter.arrow_forwardConsider the data shown in the table. Assume that the economy produces only textbooks. What is the growth rate of real GDP between the two years using last year as the base year? |Textbooks Actual Price Sold Last year This year 5,000 $50 5,250 $55 10% 5% O 2.5% 15%arrow_forward
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- 4. Suppose that the table below shows an economy's relationship between real output and the inputs needed to produce that output: LO4 Input Quantity Real GDP 150.0 $400, 112.5 300 75.0 200 a. What is productivity in this economy? b. What is the per-unit cost of production if the price of each input unit is $2? c. Assume that the input price increases from $2 to $3 with no accompanying change in productivity. What is the new per-unit cost of production? In what direction would the $1 increase in input price push the economy's aggregate supply curve? What effect would this shift of aggregate supply have on the price level and the level of real output? d. Suppose that the increase in input price does not occur but, instead, that productivity increases by 100 percent. What would be the new per-unit cost of production? What effect would this change in per-unit production cost have on the economy's aggregate supply curve? What effect would this shift of aggregate supply have on the price…arrow_forwardon Suppose the information in the following table is for a simple economy that produces only the following four goods: shoes, hamburgers, shirts, and cotton. Further, assume that all of the cotton is used to produce shirts. Product Shoes Hamburgers Shirts Cotton 2009, then the real GDP for 2016 equals: O16765 8750 19855 2009 Statistics Quantity 100 85 60 11,000 O8265 Price $52.00 3.00 35.00 0.85 2016 Statistics Quantity 115 120 55 10,000 Price $65.00 3.00 30.00 0.70 2017 Statistics Quantity 110 135 75 11,000 Price $70.00 3.50 30.00 0.75 If the base year is the yeararrow_forwardIf in some year nominal GDP was $40 billion and the GDP deflator was 70, what was real GDP? O $30.0 billion O $110.0 billion O $57.1 billion O $175,0 billionarrow_forward
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