ECO 200: Principals of Macroeconomics, Homework Chapter 10
A steel company sells some steel to a bicycle company for $150. The bicycle company uses the steel to produce a bicycle, which it sells for $250. Taken together, these two transactions contribute
$250 to GDP
Which of the following statements regarding GDP is correct?
GDP includes factory production, but not any harm that may be inflicted on the environment.
In a simple circular-flow diagram, total income and total expenditure are
always equal because every transaction has a buyer and a seller
Gasoline is considered a final good if it is sold by a
gasoline station to a motorist in Los Angeles
Jackie, a Canadian citizen, works only in the United States. The value of the output she produces is
included in U.S. GDP, but it is not included in U.S. GNP
Gross domestic product measures
income and expenditures
In order to include many different goods and services in an aggregate measure, GDP is computed using, primarily,
market prices
In a simple circular-flow diagram, firms
purchase resources from households
Which of the following is included in the consumption component of U.S. GDP?
purchases of natural gas by U.S. households
GDP is defined as the
value of all final goods and services produced within a country in a given period of time