Marco Econ Chapter 6

The US GDP in 2007 was $14,028.7 billion, and the previous year the GDP was $13,377.2 billion. What was the rate of growth in GDP in 2007?

(14,028.7 billion - 13,377.2 billion) / 13,377.2 * 100 = 4.87%

Consider the information Consider the information about the economy of Pakistan. Note that the currency of Pakistan is the rupee. The government purchases: 2.50 trillions of rupees. Individuals consume: 11.20 trillions of rupees. Individuals save: 5.53 trillions of rupees. Businesses invest: 1.40 trillions of rupees. Foreigners spend: 0.60 trillions of rupees to purchase Pakistani firms. Pakistan imports: 2.63 trillions of rupees. Pakistan exports: 1.38 trillions of rupees. Calculate Pakistan's GDP. Assume that the values are all current and no conversions need to be made. Give your answer in terms of trillions of rupees, and round to two decimals.

11.20 + 1.40 + 2.50 + (1.38 - 2.63) 13.85

Use the table to answer the questions. Round your answers to the nearest cent Country A - 2.5 trillion GDP, 100 million Population Country B - 6 trillion GDP, 960 million Population What is the GDP per capita for Country A? What is the GDP per capita for Country B? Which country has the largest average GDP per capita?

2.5 trillion / 100 million = 25,000 6 trillion / 960 million = 6,250 Country A

Use the table to answer the questions. Assume firms pay all profits out to resource owners, there is no depreciation, and there are no taxes. Consumption spending (𝐂) $375 Rent $ 60 Profit $120 Investment spending (𝐈) $50 Interest $15 Government spending (𝐆) $100 Net exports (𝐍𝐗) $5 Employee compensation $ Enter the value of GDP in 2010. Use the factor income approach to calculate employee compensation in 2010

375 +50 + 100 + 5 = 530 335

Suppose that Georgiania was a thriving empire in its golden age. Business was booming and it was the center of international trade under the leadership of Emperor Raphael III. His empire's pride and joy was the trading of green and black tea, and he decreed that their entire economy should be built around it. However, in the mid 1800s, Georgiania experienced a severe economic downturn when the other nations of the world created an embargo on tea from Georgiania, which led to civil strife due to thousands of workers being laid off. A downward fluctuation in the economy like this is known as..... The correct term is a key component of.....

A recession Macroeconomics

The GDP deflator formula can be used in a variety of ways. Use it to answer the questions that follow. Round final answers to two decimal places as needed. 2012 - 2,500 Real GDP, 120 GDP deflator A. Nominal GDP in 2012 = ? 2010 - 800 Nominal GDP, 300 Real GDP 2011 - 1800 Nominal GDP, 1300 Real GDP B. 2010 GDP deflator = ? C. 2011 GDP deflator = ? 2013 - 3500 Nominal GDP, 160 GDP deflator D. Real GDP in 2013 = ?

A. 2500 / 100 = 25 25 * 120 = 3,000 B. 800 / 300 = 2.666 2.666 * 100 = 266.67 C. 1800 / 1300 = 1.3846 1.3846 * 100 = 138.46 D. 3500 / 160 = 21.875 21.875 * 100 = 2,187.50

Consider the table of GDP and population for several imaginary countries Wrigleyville, 513.0 GDP in millions of US dollars, 221.0 Population in millions Longhornland, 2927 GDP in millions of US dollars, 177 Population in millions Dinkytown, 181.00 population in millions, 1.3 GDP per capita in US dollars Using this information, please answer the questions. If there is not enough information to answer a question, please enter -11. A. What is the GDP per capita of Longhornland in US dollars? Express your answer rounded to one decimal place. B. What is the GDP of Dinkytown in millions of US dollars? Express your answer rounded to one decimal place.

A. 2927 / 177 = 16.5 B. 181 * 1.3 = 235.3

Which of the statements is the best description of a business cycle?

Alternating periods of increasing and decreasing economic output

Categorize each statements as component of Gross Domestic Product (GDP): consumption, investment, government, or net exports. If it is not included in GDP, leave it unplaced.

Consumption -ice cream -a domestically manufactured personal computer -cab fare for personal use - 55 cent tacos -a ticket to a local sporting event Investment - a domestically manufactured business computer Government - a public school teacher's salary Net exports -an exported dollhouse Not included in GDP -babysitting paid for in cash and unreported -the purchase of company stock -government welfare payments

In Vintland, sanitation engineers are being replaced with garbage robots, which have fewer negative effects and many more significant benefits. However, the labor cost efficiency of garbage robots has driven down the price of collecting garbage so significantly that sanitation engineers can no longer compete. After six months, everybody has switched to the cheaper and better garbage robots. Assume that Vintland consumes the same quantity of collecting garbage now as they did six months ago. Please select the choice that best describes the short‑run effects of this industrial change on Vintland's GDP and its standard of living.

GDP decreases and standard of living increases

How is the GDP deflator calculated? Place the labels in the correct locations to produce the equation for the GDP deflator. Then, answer the multiple choice question. The GDP deflator measures...

GDP deflator = (nominal GDP / real GDP) * 100 Price levels

In what way(s) does GDP per capita NOT provide an accurate representation of living standards?

GDP per capita does not account for changes in environmental quality GDP per capita does not measure production that occurs outside of the market economy GDP per capita does not account for how people distribute their time between work and leisure

Classify the given goods according to whether or not they would be included in calculating the GDP for the United States. All goods should be placed. If a country is not specified, you can assume the action is performed in the United States

Included in the GDP of the US -Honda's assembly and sale of cars in the US -Old Navy purchases mannequins to display clothes NOT included in the GDP of the US -sale of wheat to Mrs. Baird's Bakery -Resale of used textbooks to college students -GM's assembly and sale of cars in Mexico -Ocean Spray purchases plastic to make bottles

Please match the situations to the appropriate box based on whether the change signals: An increase in GDP and improved standard of living An increase in GDP without improved standard of living, or No increase in GDP and improved standard of living.

Increases GDP and the standard of living -improvements in production technologies -school quality increases from procurement of new equipment Increases GDP but not the standard of living -household unpaid work becomes formalized in GDP -The black market shrinks because firms shift to the formal sector, but production remains the same Does not increase GDP but increases standard of living -workers work less but produce the same amount -volunteers clean a river for swimming -income inequality decreases, and people dislike inequality -School quality increases from parental involvement

What is the difference between real and nominal gross domestic product (GDP)?

Nominal GDP for a given year is measured in dollars of that year, whereas real GDP is measured in dollars of some base year

The market value of which of the items would be considered double (or multiple) counting in the calculation of GDP? Please place items into the appropriate category

Not included in GDP because of double counting -wheels used to produce a skateboard that will be sold new -a used copy of the Tony Hawk video game -a used skateboard you buy for your brother -a previously owned collectors skateboard Included in GDP -a new skateboard you buy for your niece -the commission paid to the seller of a perviously owned collectors skateboard

What does the investment component of GDP measure? A good produced in the current time period but put into a firm's inventory instead of being sold

Spending on goods to be used in future production is considered unsold inventory and counted as part of investment in current GDP

Choose the multiple choice answers, which when strung together, create an accurate definition of GDP.

The US nominal gross domestic product is -all final goods and services legally produced -within the territorial boundaries of the United States within a given -time period and valued at -the prices at which the goods or services are sold

Label the statements as increasing GDP in either Canada or the United States -Toyota, a Japanese company, manufactures cars in San Antonio, Texas -Toyota, a Japanese company, manufactures cars in Toronto, Ontario -ATI Technologies, a Canadian company, operates in Alberta -Starbucks, a US company, opens stores in New York state -Tim Horton's, a Canadian company, opens coffee shops in New England

increases GDP in the United States Increases GDP in Canada Increases GDP in Canada Increases GDP in the United States Increases GDP in the United States

Real GDP per capita is NOT an adequate measure of

the well-being of each person in an economy