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Brief Principles of Macroeconomics...

8th Edition
N. Gregory Mankiw
ISBN: 9781337091985

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BuyFindarrow_forward

Brief Principles of Macroeconomics...

8th Edition
N. Gregory Mankiw
ISBN: 9781337091985
Textbook Problem

  1. What components of GDP (if any) would each of the following transactions affect? Explain.

a. Uncle Henry buys a new refrigerator from a domestic manufacturer.

b. Aunt Jane buys a new house from a local builder.

c. The Jackson family buys an old Victorian house from the Walker family.

d. You pay a hairdresser for a haircut.

e. Ford sells a Mustang from its inventory to the Martinez family.

f. Ford manufactures a Focus and sells it to Avis, the car rental company.

g. California hires workers to repave Highway 101.

h. The federal government sends your grandmother a Social Security check.

i. Your parents buy a bottle of French wine.

j. Honda expands its factory in Ohio.

Sub part (a):

To determine

Component of GDP affected by transaction.

Explanation

The GDP is the summation of the monetary value of all the goods and services produced within the political boundary of a country within a financial year. The expenditure is a main part of the GDP consideration because all the expenditures turn out to be someone’s income, which can be calculated in the GDP...

Sub part (b):

To determine

Component of GDP affected by transaction.

Sub part (c):

To determine

Component of GDP affected by transaction.

Sub part (d):

To determine

Component of GDP affected by transaction.

Sub part (e):

To determine

Component of GDP affected by transaction.

Sub part (f):

To determine

Component of GDP affected by transaction.

Sub part (g):

To determine

Component of GDP affected by transaction.

Sub part (h):

To determine

Component of GDP affected by transaction.

Sub part (i):

To determine

Component of GDP affected by transaction.

Sub part (j):

To determine

Component of GDP affected by transaction.

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