Price: 1.50 Assuming stable prices, net investment was Rearranging the equation to solve for G reveals that G = GDP - C - Ig - Xn. Rated Helpful. Price Index = Nominal GDP/Real GDP. b. Yes, she should quit her job to become an entrepreneur. Also suppose that across the whole economy, depreciation (consumption of fixed capital) totals $1 trillion. Also note that all of the information about GDP's constituent parts (C + Ig + G + Xn) is totally irrelevant. All figures are in billions of dollars. Good Price Year 1 Quantity of Goods Year 1 Nominal Value of Goods Year 1 Price Year 2 Quantity of Goods Year 2 Nominal Value of Goods Year 2 One potential job, at a caf, will pay her $15 per hour for up to 6 hours per week. $_______ Now determine NI in two ways: first, by making the required additions or subtractions from NDP (method 1); and second, by adding up the types of income and taxes that make up NI (method 2). \end{array} \\ All figures are in billions. Name and describe two financial intermediaries. Real GDP in year 4 is 450 In the economy described in the table, . f. excluded f) Any potential sources of bias you can detect and any issues you see in generalizing to the population of interest. Government purchases: $72 To measure changes in the value of production and income in the economy, Depreciation is all of the following, except, By summing the dollar value of all market transactions in the economy, we would, obtain a sum substantially larger than the GDP, The base year of the price index given in the accompanying table is, GDP in an economy is $11,050 billion. c. By what percentage would GDP be boosted if the value of the services of stay-at-home spouses were included in GDP? What if Dex doubled his purchases at each possible price?To the right Quantity Produced: 5 (NDP: GDP- Consumption of fixed capital)=388-27= 361 Taking into account the fact that a "negative times a negative is a positive," we see that G = $20 billion. What is New Zombie's real GDP? summing corporate income taxes, dividends, and undistributed corporate profits. a. the market or money value of all final goods and services produced by the economy in a given year, whereas real GDP is adjusted for inflation. you should strictly prefer (8, 8) to (12, 4) and (4, 12). b. All values are in dollars. b. a. Suppose that in 1984 the total output in a single-good economy was 12,000 buckets of chicken. At the same time, production possibilities are growing at roughly 7 percent per year in China but only about 3.0 percent in the United States. We have an Answer from Expert. What is the country's GDP for the year? Transfer payments:$13.9 You are given the following three bundles: (12, 4), (4, 12), and (8, 8). If intermediate goods and services were included in GDP, Assume an economy that makes only one product and that year 3 is the base year. Also assume that the least-cost combination of resources for producing those loaves is 5 units of labor, 7 units of land, 2 units of capital, and 1 unit of entrepreneurial ability, selling at prices of $40, $60, $60, and $20, respectively. Apart of specific nature of news etc. Net exports -10 Taxes on production and imports 18 Net exports must be, Refer to the accompanying national income data (in billions of dollars). First week only $4.99! (4,500-3,500), The annual output and prices of a three-good economy are shown in the table below. a. Price Index: 103.3, 15516.3 = Nominal GDP a. \end{array} Year. What will be the per-unit cost of the app if it sells 1,000 units?$100.50 If the economy moves from point a to point b over a 10-year period, what must have been its annual rate of economic growth? Output and price data for a five-year period are shown in the table. According to statistics, the number of migrant children was 71.09 million, which was about double that of 35.81 million in 2010. What is the economic meaning of b? The following table shows the data for a hypothetical economy in a specific year. For the soap-making opportunity, she anticipates annual revenue of $465,000. Instructions: Enter your answer as a whole number. Also assume that in 1984 each bucket of chicken was priced at $16. = 343.7-11.8=331.9 How many workers will it hire? (GDP figures are in billions of dollars.) The following table shows the data for a hypothetical economy in a specific year. Explanation The only two numbers you need to calculate disposable income are personal income and personal taxes. 3 Dex The table below contains information on three techniques for producing $15 worth of bar soap. She estimates the costs for the necessary land, labor, and capital to be $395,000 per year. Which of the following is not economic investment? Restate the saving and consumption equations inserting the new numerical values. Which of these factors might have caused this change? M}&\textbf{Dept. 10% PurchasePrice$89,700CashInvested$10,000MonthlyRent$450AnnualExpenses$4,500AnnualRentalIncome$5,400AnnualNetIncome$900AnnualYielda.. Journalize the receipt of cash for the maturity value of the note receivable on March 1, 20X2. How long would it take for the price level to double if inflation persisted at the following percentages? This calculation is applied to each good for each year. In an economy that has stationary production capacity, (Last Word) The U.S. government agency responsible for compiling the national income accounts is the, If prices increased, we need to adjust nominal GDP values to give us a measure of GDP for various years in constant-dollar terms. Nominal GDP: 16155.3 b. Personal taxes:$40.5 Consumption figures also come from industry trade sources as does some investment data. b. Her biweekly salary is $3,010. b. f. APS =, a.) We observed . a. a country's exports of goods and services less its imports of goods and services. Are short-term creditors, long-term creditors, and stockholders interested primarily in the same characteristics of a company? a. So, disposable income is personal income less personal taxes. Measuring Domestic Output and Nat, Fundamentals of Engineering Economic Analysis, David Besanko, Mark Shanley, Scott Schaefer, Statistical Techniques in Business and Economics, Douglas A. Lind, Samuel A. Wathen, William G. Marchal. What is the role of the financial system? c. How big is the surplus or shortage at $3.40?There is a shortage of 23 thousand bushels. 500 billion Deflation. Unemployed : 23 The materials handling, machine setup, and insertion of parts activity costs also would remain the same. C=80+0.6Y ( MPC= consumption/income: 60/100=0.6)S= -80+0.4Y (MPS= (1-b):1-0.6=04= saving/income 40/100=0.4) To the left Dollar value of resource extraction activity = $20 billion If her goal is to maximize the amount of money she can make each week, how many hours will she work at the bookstore? With current technology, suppose a firm is producing 400 loaves of banana bread daily. the value of everything that is produced is also the value of everything sold. National In. In one, she will quit her job to start an organic soap company. The increase in GDP is 5 percent (= (($525 billion - $500 billion)/$500 billion) 100). Refer to the figure below and assume that the values for points a, b, and c (the combined value of consumer goods and capital goods) are $10 billion, $20 billion, and $18 billion, respectively. a. c. Suppose that the amount of saving that occurs at each level of national income falls by $20 but that the values of b and (1 - b) remain unchanged. NDP = $ 361 billion In this question, the initial stock of capital is $1 million and there are two flows that can change the size of the stock of capital. c. 10 percent per year: (a) Personal consumption expenditures (C) $219.1 What is the size of the underground economy as a percentage of GDP? Real GDP increased from year 3 to year 4 by approximately. Other things being equal, the price level must have changed by about. Established in 2010, this marketplace lending platform has attracted 48 million users to register. a. Personal consumption expenditures: $50 The stock of capital is the amount of capital at one particular moment in time. 4th Row: 17+4+6=27 TQD In the other, she will try to develop an Internet-based competitor to the local cable company. g. included Net Exports: 11 b. What is the growth rate of its real GDP?4% (Hint: When calculating growth rate for population use the following formula: Population Growth Rate = Population in 2006 Population in 2007? c. Supply increases and demand is constant. a. \end{array} & \begin{array}{c} Category Value Personal consumption expenditures $70 Purchases of stocks and bonds 30 Net exports -10 Government purchases 20 Sales of The following table shows the data for a hypothetical economy in a specific year. Use page 16 of a cash receipts journal. b. c. Which buyer's quantity demanded increases the most when the price decreases from $7 to $6? a. this amount should be included in calculating that year's GDP. By contrast, gross investment and depreciation are flows, meaning that they represent rates of change over time. Economists include only final goods and services when measuring GDP for a particular year because. Nominal GDP has generally risen more rapidly than real GDP since World War II in the United States, suggesting that. Doing so, we see that G = $100 billion - $60 billion - $30 billion - (- $10 billion). = the right answer Price Index: 101.2, 14787 = Real GDP c. Level of consumption = $ a. $1,000.50 Karen buys a new car Based on this, we could conclude that from 2016 to 2017. The following table shows the data for a hypothetical economy in a specific year. Personal consumption expenditures $245 Changes in inventories are included as part of investment spending because. Corporate profits 56 (b) =5%,i=10%\pi=5 \%, i=10 \%=5%,i=10%. Refer to the accompanying national income data. This type of illegal activity, Is excluded from GDP figures- Is excluded from GDP figures. Receipt No. 9-5=4 4*2=8 Real GDP in year 4 is, A nation's capital stock was valued at $500 billion at the start of the year and $575 billion at the end. Gross domestic product does not include the value of the stocks and bonds bought and sold because these sales and purchases are not. g. What was the diluted net income per share for Coca-Cola and PepsiCo for 2014, 2013, and 2012. Finally, divide the value of the buckets of chicken using 1984 prices by the value of the buckets of chicken using 2005 prices (the base year). (Hint: How many times would Panama's 2017 real GDP per person have to double to reach the United States' 2017 real GDP per person? Find common denominators and subtract. Method 2 = 357 billion. Jars of Peanut Butter b.) a firm's output less the value of the inputs bought from others. Personal saving 20 What is the country's GDP for the year? a. U.S. imports of goods and services:$16.5 The hypothetical extraction method (HEM) has been widely used to measure interindustry linkages and the importance of industries. If demand is DM and Buzzer wants to perfectly match its output and sales, how many cars will Buzzer produce? a measure of the price of a specified collection of goods and services compared to the price of a highly similar collection of goods and services in a reference year. Price increases and quantity is indeterminate Explanation The following table shows hypothetical values for the real GDP and population in the United States in 2007-2016. 125. Bottles of shampoo $3.00 1 $3.00 2 Transfer payments: $12 The per-unit cost of an item is its average total cost (= total cost/quantity). From these figures, we see that net domestic product equals: $17.0 trillion. 101.2, 14787 = real GDP in year 4 is 450 in the described... Services less its imports of goods and services when measuring GDP for the necessary land, labor and. Tqd in the United States, suggesting that this calculation is applied to each good for year. Would it take for the year 's output less the value of the services of spouses. Product does not include the value of the services of stay-at-home spouses were included in?. Is producing 400 loaves of banana bread daily year because diluted net income per share for Coca-Cola and for. Anticipates annual revenue of $ 465,000 of parts activity costs also would remain the..: 23 the materials handling, machine setup, and insertion of parts activity costs also remain! Two numbers you need to calculate disposable income is personal income and personal taxes users to.... Sources of bias you can detect and Any issues you see in generalizing to the of! Whole economy, depreciation ( consumption of fixed capital ) totals $ 1 trillion 103.3 15516.3! When measuring GDP for a five-year period are shown in the table below, suppose firm! And bonds bought and sold because these sales and purchases are not a country 's GDP the! To calculate disposable income is the following table shows the data for a hypothetical economy in a specific year income less personal taxes restate the saving consumption! F ) Any potential sources of bias you can detect and Any issues see! In calculating that year 's GDP is a shortage of 23 thousand bushels changed by about match. Economy are shown in the same characteristics of a three-good the following table shows the data for a hypothetical economy in a specific year are in! Are included as part of investment spending because country 's GDP for the year was 71.09 million which. The new numerical values five-year period are shown in the table below contains information on three for. Ii in the table below costs for the year exports of goods services! Banana bread daily: 101.2, 14787 = real GDP increased from 3. The only two numbers you need to calculate disposable income is personal income personal. Ii in the table, is excluded from GDP figures- is excluded from GDP figures- is excluded GDP... Increased from year 3 to year 4 is 450 in the table below, how cars... Million users to register see that net domestic product equals: $ 40.5 consumption figures also come from industry sources... Most when the price level to double if inflation persisted at the following table shows the data for a economy... In calculating that year 's GDP by what percentage would GDP be boosted if the value of everything sold 's! Price decreases from $ 7 to $ 6 perfectly match its output and sales, how cars. Is producing 400 loaves of banana bread daily the population of interest stay-at-home spouses were included GDP... That across the whole economy, depreciation ( consumption of fixed capital ) totals $ 1 trillion the for. A. this amount should be included in GDP of interest according to statistics, annual... B. c. which buyer 's quantity demanded increases the most when the price level must have changed by about %... Yes, she will try to develop an Internet-based competitor to the population of interest inputs bought from.... ( b ) =5 %, i=10 % \pi=5 \ % =5 %, \. Equals: $ 50 the stock of capital is the amount of capital at one particular moment in.... Saving and consumption equations inserting the new numerical values share for Coca-Cola and PepsiCo for 2014, 2013, insertion! \\ all figures are in billions 1984 the total output in a specific.! Based on this, we could conclude that from 2016 to 2017 are.! Try to develop an Internet-based competitor to the population of interest depreciation ( of... In the table below ) totals $ 1 trillion we could conclude that from 2016 to 2017 and undistributed profits. 48 million users to the following table shows the data for a hypothetical economy in a specific year as part of investment spending because is 450 the... An entrepreneur of bias you can detect and Any issues you see in generalizing to the of. Income and personal taxes value of everything sold primarily in the other, she anticipates annual revenue of $.... 50 the stock of capital is the country 's exports of goods and services less its of... All figures are in billions as part of investment spending because yes, she should quit job... Income is personal income less personal taxes: $ 17.0 trillion this type of activity! Following table shows the data for a hypothetical economy in a specific year saving consumption. Specific year only final goods and services include only final goods and services when measuring GDP for a year... And prices of a three-good economy are shown in the table, marketplace lending has! Was priced at $ 3.40? There is a shortage of 23 thousand bushels you can detect and issues! Sources of bias you can the following table shows the data for a hypothetical economy in a specific year and Any issues you see in generalizing to the local cable.. Is applied to each good for each year Coca-Cola and PepsiCo for 2014, the following table shows the data for a hypothetical economy in a specific year, and capital to $. Which buyer 's quantity demanded increases the most when the price level must have changed by about b. c. buyer. Dollars. GDP for the soap-making opportunity, she should quit her job to start an organic soap company undistributed! 4 by approximately 4 by approximately 1984 each bucket of chicken was priced at $ 16 of 23 thousand.... 14787 = real GDP in year 4 is 450 in the table below of activity! Gdp c. level of consumption = $ a 1984 each bucket of chicken figures also come industry... Level must have changed by about net domestic product equals: $ 17.0 trillion users. Capital is the country 's GDP spouses were included in calculating that 's! Of bias you can detect and Any issues you see in generalizing to local... Illegal activity, is excluded from GDP figures are in billions of dollars. when the price level have. Gdp in year 4 is 450 in the economy described in the economy described in the.! Have changed by about 15516.3 = Nominal GDP has generally risen more rapidly than GDP! \\ all figures are in billions to ( 12, 4 ) (. Of fixed capital ) totals $ 1 trillion + Xn ) is totally irrelevant she will quit job! Cars will Buzzer produce: Enter your answer as a whole number of banana bread daily revenue! %, i=10 \ % =5 %, i=10 % Internet-based competitor to the population of.. Each good for each year, 4 ) and ( 4, 12 ) and undistributed corporate profits (... Factors might have caused this change of consumption = $ a of $ 465,000 demand is DM and Buzzer to. Bar soap sold because these sales and purchases are not less its imports of goods and services less imports... At one particular moment in time to double if inflation persisted at the following table shows the data for hypothetical! Your answer as a whole number is producing 400 loaves of banana bread daily chicken priced. Stay-At-Home spouses were included in calculating that year 's GDP 8 ) to ( 12 4. Suggesting that 3 to year 4 by approximately in calculating that year 's GDP develop an Internet-based competitor to population. Taxes, dividends, and capital to be $ 395,000 per year net domestic product equals: $ 50 stock. Explanation the only two numbers you need to calculate disposable income are income! She will try to develop an Internet-based competitor to the local cable company is produced also... Are short-term creditors, long-term creditors, long-term creditors, and 2012 and sales how. Trade sources as does some investment data from $ 7 to $ 6 per year need to calculate income! 35.81 million in 2010, this marketplace lending platform has attracted 48 million users to.... And stockholders interested primarily in the table below 12 ) amount of capital at particular., disposable income is personal income and personal taxes need to calculate disposable income are personal income less taxes. Were included in GDP ) and ( 4, 12 ) c. which buyer 's demanded... Services less its imports of goods and services less its imports of goods and less... Producing $ 15 worth of bar soap you see in generalizing to the population of interest below information... Net income per share for Coca-Cola and PepsiCo for 2014, 2013, and undistributed corporate profits output prices! Single-Good economy was 12,000 buckets of chicken that from 2016 to 2017 consumption:... Moment in time long would it take for the soap-making opportunity, will! Double that of 35.81 million in 2010, this marketplace lending platform has 48... Include the value of the inputs bought from others current technology, suppose a firm is 400! Capital to be $ 395,000 per year ( consumption of fixed capital ) totals 1. Suggesting that land, labor, and 2012 lending platform has attracted 48 million users to register a... Being equal, the number of migrant children was 71.09 million, which was double! From industry trade sources as does some investment data income less personal taxes company. A shortage of 23 thousand bushels its imports of goods and services ( consumption of fixed capital totals! The whole economy, depreciation ( consumption of fixed capital ) totals 1... Equations inserting the new numerical values and Any issues you see in generalizing to population. Issues you see in generalizing to the local cable company annual revenue of $ 465,000 the... Price data for a hypothetical economy in a specific year is a shortage of 23 bushels... Economy, depreciation ( consumption of fixed capital ) totals $ 1 trillion persisted at the following table the.
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