ECON Ch 27 Homework

Which of the following is included in GDP?

Consumption Expenditures (C), Gross Private Domestic Investment (I) Government Purchases (G) Net Exports (NX)

Which of the following is the best definition of GDP

The total market value of all final goods and services produced quarterly/annually within the boundaries of a nation.

The difference between nominal GDP and real GDP?

Nominal GDP includes inflation, while real GDP adjusts for inflation.

Arthur sells $100 worth of cotton to Bob. Bob turns the cotton into cloth, which he sells to Camille for $300. Camille uses the cloth to make prom dresses that she sells to Donita for $700. Donita sells the dresses for $1,200 to teens planning to go to the prom. The total contribution to GDP of this series of transactions is

$1,200

Refer to the table above. If there was another row that showed the retail sales value and the added value of retail was $2000, the total value contributing to GDP at all stages of production would be

$10,000.

Real GDP in year 4 will be

$108

Refer to the table , GDP in this economy will be

$25,500

The Price index in year 4 is

150

A durable good can be best described as

Having a lifespan of over 3 years.

Expenditures on the research and development (R&D) of new productive technologies

are included in Gross Private Domestic Investment