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21 Oct 2020

Which of the following kinds of expenditures will not be included in the computation of GDP?

    1. A person buying bread at local bakery

    2. A small-town factory buying new plant to expand business 

    3. A person receiving remittance from a friend abroad

    4. The government building a dam

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Macroeconomics
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GDP
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Kristelle Balando
Kristelle BalandoLv10
21 Oct 2020

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Related questions

1. For the economy as a whole Income must be more than expenditures.

Select one:

a. False

b. True

 

2. When measuring the Consumer Price Index (CPI), the major problems faced are:

Select one:

a. Substitution bias

b. Introduction of new goods

c. Unmeasured quality change.

d. All the above

 

3. Household spending on education is included in the consumption of services.

Select one:

a. True

b. False

 

4. Which of the following items is not part of the GDP calculation?

Select one:

a. The government expands the highway between two main cities.  

b. A person purchases a local car

c. A number of unemployed citizens receive unemployment insurance benefits.  

d. Local citizens receiving medical care

Which category of GDP does each of the following items count in? Enter one of the following letters to correspond to consumption, investment, government purchases, net exports, or does not count (C, I, G, NX, DNC). Enter one letter only in each blank or enter DNC if the transaction does not count. Do not enter the full word.

Nissan produces a car at its Tennessee plant in December but does not intend to sell it until after the end of the year ______, An auto parts maker buys an idle textile plant in North Carolina with the intent of converting it to a distribution center______, The U.S. Army rents a warehouse to store surplus equipment _____, Boeing buys some new machinery for its assembly plant in South Carolina ______, A state employees' pension fund in California buys $10 million in corporate bonds_____, A local bakery buys 500 pounds of flour to make bread ______, A doctor buys a painting to hang in his office waiting for an area from an artist on Etsy ______, A family rents a beach house for a week's vacation ______, A retiree in Chicago receives a Social Security check from the U.S. Treasury______, A factory in the U.S. produces chemicals and sells them to a firm in Canada ______.

 

Calculate the missing data.

Calculate missing data from the table.

Income/Expenditure Flows

Amount (in billions)

Consumption expenditure

$7

Government expenditure

$5

Depreciation

$3

Net taxes

$2

Investment

$4

Net exports

$1

Expenditures

Income

GDP

Calculate the following.

Using the data from a partial set of national income and expenditure data, address the following:

Calculate gross domestic product (GDP) using the expenditure approach.

Determine net domestic product, gross national product (GNP), and statistical discrepancy.

Item

Amount in 2010 (in billions)

Government expenditure (G) =

$8

Consumption expenditure (C) =

$20

Investment (I) =

$5

Net exports (NX) =

$1.5

GDP (expenditure approach)=

Total wages =

$21

Net operating surplus =

$11

Net domestic product =

Indirect taxes minus subsidies =

$3.5

Capital consumption =

$2

GDP (income approach)=

Statistical discrepancy =

Net factor income from abroad =

$5.5

GNP =

Consider the tables.

Given production and price data below, address the following:

Calculate an economy's nominal GDP and real GDP.

In 2000:

Item

Quantity (millions)

Price ($/unit)

Expenditure

(millions of $)

Socks

15

5

75

SIM cards

20

2

40

Defense Budget

9

5

45

Real/Nominal GDP = 160

In 2003:

Item

Quantity (millions)

Price ($/unit)

Expenditure

(millions of $)

Socks

15

5

75

SIM cards

20

5

100

Defense Budget

20

10

200

Nominal GDP =

2003 Quantities valued at 2000 prices:

Item

Quantity (millions)

Price ($/unit)

Expenditure

(millions of $)

Socks

SIM cards

Defense Budget

Real GDP =

Answer the following questions.

How do you measure GDP?

How do you measure real and nominal GDP?

How do you determine Consumer Price Index and what are its limitations?

Which of the following expenditures will be included in GDP which will be excluded from the calculation? Explain your answers.

Spare tires bought by Across America, a car rental company

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Cabinets purchased by a furniture store

A new car purchased by an NFL player

A cruise ship bought by Carnival

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