Test Bank Solution Manual for Macroeconomics - GDP Already Passed
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Course
Macroeconomics
Institution
Macroeconomics
Test Bank Solution Manual for Macroeconomics - GDP Already Passed
GDP - Gross Domestic Product - Answers The total market value of all final goods and services produced annually within a country's borders.
Final Good - Answers A good in the hand of its final user. (e.g. buy goods at HEB)
Interm...
Test Bank Solution Manual for Macroeconomics - GDP Already Passed
GDP - Gross Domestic Product - Answers The total market value of all final goods and services produced
annually within a country's borders.
Final Good - Answers A good in the hand of its final user. (e.g. buy goods at HEB)
Intermediate good - Answers A good that is an input to the production of a final good. e.g. farmer taking
goods to mill
Double/multiple counting - Answers Counting a good more than once when computing GDP
Transfer payment - Answers A payment to a person that is not made in return for goods and services
currently supplied. (Social security?)
Per Capita GDP - Answers If we divide a country's GDP by the population in the country, we get per
capita GDP.
Calculate GDP - Answers multiply the quantity of each good produced by the quantity of good produced.
GDP=[PQ
Consumption/household sector - Answers Sum of spending on durable goods, non durable goods and
services. largest component of US GDP - 70%
Durable goods - Answers Goods that are expected to last for more than 3 years e.g. refrigerators ovens
or cars
Non durable goods - Answers Goods that are not expected to last for more than 3 years e.g. food
Services - Answers intangible items eg lawn are, car repair and entertainment
Investment/Business sector - Answers The sum of all purchases of newly produced capital goods,
changes in business inventories and purchases of new residential housing. e.g. new machincery
Government purchases - Answers Federal, state and local government purchases of goods and services
and gross investment in highways, bridges and so on
Fixed investment - Answers business purchases of capital goods, e.g. machinery and factories and
purchase of new residential housing.
Net Exports - Answers Exports mince imports
Calculate GDP using expenditure - Answers C + I + G + (EX-IM)
consumption +Investment+government purchases + Net export
National income - Answers Total income earned by US Citizens and business no matter where they
reside or are located.
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