Exam 19: Introduction to Macroeconomics and Gross Domestic Product

Joe sells the house he has lived in for 10 years to the Smith family for $300,000.He receives $50,000 more than his original purchase price 10 years ago.Joe pays his real estate agent a 5 percent sales commission.This transaction will increase gross domestic product (GDP)by

Explain the significance of the equation GDP = C + I + G + NX.

Net exports can be defined as

If real gross domestic product (GDP)grew by 4 percent and nominal GDP grew by 3 percent,then the inflation rate was

Explain why it is reasonable to count not just goods but also services as part of gross domestic product (GDP).

If gross domestic product (GDP)is supposed to measure quantity of goods produced,why is GDP given as an amount of money rather than a quantity of goods produced?

Draw a graph to illustrate the phases of the business cycle.Be sure to identify the length of a contraction and an expansion.Identify a peak and a trough.

Consider the following data that gives the quantity produced and unit price for three different goods across two different years to answer the following questions. Assume that the base year is 2015. -What was the inflation rate between the two years?

Which of the following is a service?

Consider the following data that gives the quantity produced and unit price for three different goods across two different years to answer the following questions. Assume that the base year is 2015. -What was the real gross domestic product (GDP)in 2016?

You bought stock in 2010 for $100 and you sold it in 2012 for $200.You used a broker to sell the stock for you,and he charged you $20.This transaction contributed ________ to gross domestic product (GDP).

When George buys a new computer for his business,it is included in gross domestic product (GDP)as ________,and when he buys a new computer for use at home,it counts as ________.

For the following questions, suppose a country has the following quarterly growth data for the last three years: -The country's long-run average growth rate is 3 percent.How many quarters were spent in recession?

Farmer Bill grows wheat and sells it to the miller for $50,000.The miller turns it into flour and sells it to the bakery for $75,000.The bakery uses the flour in the bread that it sells to people for $90,000.The total contribution to gross domestic product (GDP)is

To avoid double counting when calculating gross domestic product (GDP),it is best to count

Government salaries paid to soldiers in the military are included in the ________ category of gross domestic product (GDP).

Which of the following is included in the government purchases category of gross domestic product (GDP)?

Nominal gross domestic product (GDP)increased from $15.62 trillion to $16.09 trillion,and the price level increased from 120.0 to 122.4.Rounding to the nearest first decimal,the rate of inflation was

Farmer John produces oranges.He sells half of his inventory to people at his roadside stand for $20,000 and sells the other half to Tropicali for $15,000.Tropicali uses the oranges to make orange juice,which it sells to consumers for $25,000.The impact of these transactions on gross domestic product (GDP)is

Real gross domestic product (GDP)is GDP adjusted for changes in