Liberty
University ECON 214 Problem
Set 1 solutions answers right
1) If
Max receives an unemployment check, would you include that transfer payment
from the government in this year’s GDP? Why or why not?
2) In
the following situations, explain what is counted in this year’s GDP:
a. You
bought a new Wii at GameStop last year and resold it on eBay this year.
b. You
purchase an Investing for Dummies book at Barnes and Noble.
c. You
purchase a historic home using the services of a real estate agent.
d. You
detail your car so it is spotless inside and out.
e. You
purchase a new hard drive for your old laptop.
3) To
which component of GDP expenditure (C, I, G, or NX) does each of the following
belong?
a. Swiss
chocolates imported from Europe.
b. A
driver’s license you receive from the Department of Motor Vehicles.
c. A
candle you buy at the local store.
d. A
new home.
4) Many
goods and services are illegally sold or legally sold but not reported to the
government. How would increased efforts to count those goods and services
affect our calculation of GDP?
5) Fill
in the missing data in the following table:
|
Year
|
Nominal GDP
|
Real GDP
|
GDP Deflator
|
|
2007
|
100000
|
|
94
|
|
2008
|
|
112000
|
100
|
|
2009
|
130000
|
114000
|
|
|
2010
|
150000
|
|
117.2
|
|
2011
|
|
145000
|
130
|
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