As you mentioned, measuring the black market economy is not easy. Do you have any thoughts on how to include it in GDP? If GDP stands for "Gross Domestic Product", then there must be a production to be included in it. Are there any goods or services produced? If so, how should we include it? How about the volunteer work? Although this may be easier to measure in monetary terms, it may have some challenges too. In which of the complonenets of GDP would you inlude it?

As you mentioned, measuring the black market economy is not easy. Do you have any thoughts on how to include it in GDP? If GDP stands for "Gross Domestic Product", then there must be a production to be included in it. Are there any goods or services produced? If so, how should we include it? How about the volunteer work? Although this may be easier to measure in monetary terms, it may have some challenges too. In which of the complonenets of GDP would you inlude it?

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter19: Measuring Economic Performance

Section: Chapter Questions

Problem 1P

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Suppose that there are two individuals in an economy, Person 1 and Person 2. Person 1 buys asecond-hand car from Person 2 for $12,000.10. What is the change in GDP according to the Income Approach here? What is the changeof each person’s contribution to GDP according to the Income Approach? Suppose now instead that an individual was buying $400 of wine from a domestic producer ofwine. Now suppose that this individual decides to import $400 of wine instead.11. What is the change of Consumption (C), Investment (I), Government Spending (G), NetExports (NX), and GDP as calculated by the Expenditure Approach in this example?Finally, now consider the following table:Government Purchases of Goods andServices$58.5Indirect Taxes Less Subsidies $29Personal Income Taxes $41.5Wages and Compensation $165.5Interest on Public Debt $15.5Consumption Expenditure $168.4Exports $90.9Depreciation $33.5Imports $93.3Gross Investment $67.2Net Interest Income $19.0Business Profits Before Taxes $45.512. What is…
Wha t components of GDP (if any) would each of thefollowing tt"a:nsactions affc,: t? Explain.a. Uncle Henry buys a new refrigerator from adomestic manufactu=.b. Aunt Jane buys a new house from a local builder:c. The Jackson famil}' bU}'S an old Victorian housefrom the Walker fan1ily.d. You pay a hairdresser for a haircut.e. Ford sells a Mustang from its inventory to theMartinez family.f. Ford manufactures a Focus and sells il to Avis, thecar rental company.g. Cal.ilornia hires workers to repave Highway JOI.h. The federal government sends your grandmothera Social Securil y check.i. Your parents buy a bo ttle of French wine.j. Honda expands its factory in Ohio.
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Would you usually expect GDP as measured bywhat is demanded to be greater than GDP measured bywhat is supplied, or the reverse?
Which of the following would not be included in the calculation of this year's GDP? a. a headlight bulb produced this year and purchased by Ford Motor Co. from a supplier to use in the production of a car O b. a headlight bulb produced but not sold this year and thus ending up as inventory O c. a headlight bulb produced this year and purchased at Joe's Auto Supply by Olivia to replace a burnt out bulb in her car Od. a headlight bulb produced this year and purchased at a large chain auto supply store by Olivia to replace a burt out bulb in her ca
what is the uderlying assumption of income GDP?
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What components of GDP (if any) would each of thefollowing transactions affect? Explain.a. Uncle Henry buys a new refrigerator from adomestic manufacturer.b. Aunt Jane buys a new house from a local builder.c. The Jackson family buys an old Victorian housefrom the Walker family.d. You pay a hairdresser for a haircut.e. Ford sells a Mustang from its inventory to theMartinez family.f. Ford manufactures a Focus and sells it to Avis, thecar rental company.g. California hires workers to repave Highway 101.h. The federal government sends your grandmothera Social Security check.i. Your parents buy a bottle of French wine.j. Honda expands its factory in Ohio.
U.S. macroeconomic data are among the best in the world. Given what you learned in the Clear It Up "How do statisticians measure GDP?", does this surprise you, or does this simply reflect the complexity of a modern economy? Suppose GDP was modified to include the value - positive or negative - of changes in environmental quality. How could this be done accurately?
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Calculate the PPP-adjusted GDP for each of the four countries, using the information found in the table below. Instructions: Round your answers to the nearest dollar. Country Ona Rye Zolfo Avon GDP ($) 9,000 12,800 14,100 23,100 Price level (%) 8 -24 -12 23 PPP-adjusted GDP 8,333 -3,072 16,022.73 18800 M
Would you usually expect GDP as measured by what is demanded to be greater than GDP measured by what is supplied, or the reverse?