UNIT 3 AP MACRO
What would be classified as consumption?
A new car purchased by an employee of a company for personal use
Investment Spending
C
How do you measure GDP?
C+I+G+(X-M) Consumer Spending+Government Spending+Investment Spending+Exports-Imports
Which of the following is considered investment spending in GDP calculations?
Frank Construction builds a new apartment complex in Indianapolis, Indiana
Example of an intermediate good?
Goodyear tired purchased by General motors for newly produced electric cars
When consumers purchase imported products, this is:
Subtracted from GDP
An example of investment spending?
The purchase of a freezer by an ice-cream parlor
When computing GDP, goods that are produced in a particular year but NOT sold in that year:
are added to inventories and are included in investment
Consumption Spending
C
Exports
C
Government purchases of goods and services
C
GDP
Gross Domestic Product- the total market value of all final goods and services produced annually in an economy
Imports
NC
Interest
NC
Payroll and Sales Taxes
NC
Profits
NC
Purchase of stocks
NC
Rent
NC
Social security Benefit
NC
Unemployment Compensation
NC
Wages and salaries
NC
Real GDP is nominal GDP adjusted for:
changes in prices
Net exports are calculated by subtracting
imports from exports
When a firm buys a new machine for its business is considered:
investment
An intermediate good would be:
lumber used in building a house
Double counting would occur if:
used goods were included in the GDP calculation