PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
7th Edition
ISBN: 9781260110920
Author: Frank
Publisher: MCG
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Question
Chapter 5, Problem 5P
(a):
To determine
Purchase of a new car and its impact over
(b):
To determine
Purchase of a new car imported from Sweden and its impact over GDP and its components.
(c):
To determine
Purchase of a new car by the rental business and its impact over GDP and its components.
(d):
To determine
Impact of a new car by the rental business from Sweden, GDP, and its components.
(e):
To determine
Impact of a new car purchased by the government for the person.
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Q2 MCQ
. Final goods or services used to compute GDP refer to:
the sum of all wages paid to laborers.
the factors of production used to produce output.
goods and services purchased by the ultimate users.
the value of outstanding shares of stock of manufacturing firms.
Suppose that annual output in year 1 in a 3-good economy is 3 quarts of ice cream, 1 bottle of shampoo, and 3 jars of peanut butter. In year 2, the output mix changes to 5 quarts of ice cream, 2 bottles of shampoo, and 2 jars of peanut butter. If the prices in both years are $4 per quart for ice cream, $3 per bottle of shampoo, and $2 per jar of peanut butter, what was the economy’s nominal GDP in year 1? Show the calculation.
Suppose that annual output in year 1 in a 3-good economy is 3 quarts of ice cream, 1 bottle of shampoo, and 3 jars of peanut butter. In year 2, the output mix changes to 5 quarts of ice cream, 2 bottles of shampoo, and 2 jars of peanut butter.
If the prices in both years are $4 per quart for ice cream, $3 per bottle of shampoo, and $2 per jar of peanut butter, what was the economy’s nominal GDP in year 1?
Year 1 - the output combination is - 3 quarts of ice cream, 1 bottle of shampoo, and 3 jars of peanut butter.
Year 2, the output combination changes to 5 quarts of ice cream, 2 bottles of shampoo, and 2 jars of peanut butter.
The prices in both years are $4 per quart for ice cream, $3 per bottle of shampoo, and $2 per jar of peanut butter
Therefore, GDP in year 1 was $21 [= (3 x $4) + (1 x $3) + (3 x $2)].
Recall that GDP is the core measure of an economy's health. Nominal GDP (also known as current–dollar economic statistics) is not adjusted to account for any price changes.…
Chapter 5 Solutions
PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
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