BuyFindarrow_forward

Brief Principles of Macroeconomics...

8th Edition
N. Gregory Mankiw
ISBN: 9781337091985

Solutions

Chapter
Section
BuyFindarrow_forward

Brief Principles of Macroeconomics...

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

Which of the following does NOT add to U.S. GDP?

a. Air France buys a plane from Boeing, the U.S. aircraft manufacturer.

b. General Motors builds a new auto factory in North Carolina.

c. The city of New York pays a salary to a policeman.

d. The federal government sends a Social Security check to your grandmother.

To determine

The components included in the GDP of the US.

Explanation

GDP is the summation of monetary value of all the goods and services that are produced by the country within its political boundary, within a financial year. Thus, it will take all the final goods and services produced in a year in the country into account.

Option (d):

The economy of the US does not include the transfer payments made by the government for the betterment of the living conditions of the poor and the elderly population in the economy in its GDP estimation. The GDP is the value of all the final goods and services produced within the economy in a financial year and thus, the social security check paid will not be a part of the GDP of the US. So, option ‘d’ is correct.

Option (a):

The GDP is the summation of monetary value of all the final goods and services produced within the domestic territory of the economy in a financial year...

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

Identify the major compensation decisions that HRM managers make.

Foundations of Business (MindTap Course List)

IRR AND NPV A company is analyzing two mutually exclusive projects, S and L, with the following cash flows: Th...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

How does standard costing improve the control function?

Cornerstones of Cost Management (Cornerstones Series)