Question 1

Several adjustments must be made to net domestic product at factor cost in order to calculate GDP.One of these adjustments is adding depreciation.What is depreciation and why must it be added?

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Question 2

What is the Human Development Index?

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Question 3

You buy new water skis and other new equipment for $2,500 and take a week off of your job,where you earn $1,000 a week,to go water skiing.The equipment you purchased was all produced in the United States.You think that the week was worth $4,000.As a result of your vacation,GDP changes by how much?

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Question 4

What is the difference between real and nominal GDP,and why do economists make this distinction?

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Question 5

When total output,income,employment,and trade decline for 6 to 12 months,the economy is in what part of the business cycle?

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Question 6

Explain how GDP is measured according to the expenditure and income approaches.

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Question 7

-The table above gives the values of different expenditures in the United States during 1999.Answer the following questions about the United States.
a.What was the value of net exports of goods and services in 1999?
b.What was (nominal)GDP equal to in 1999?
c.What was the (nominal)value of total production equal to in 1999?

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-The table above gives the values of...

Question 8

"When you purchase $1,000 of stock in Microsoft,your purchase is an investment and hence is part of GDP." Is this assertion correct? Explain your answer.

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Question 9

Is it possible for nominal GDP to increase while real GDP does not change?

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Question 10

"If country A has a higher level of real GDP per person than country B,then people in Country A must enjoy a higher standard of living than people in Country B." Is this statement true or false? Explain your answer.

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Question 11

What is a business cycle? What are its phases and turning points?

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Question 12

Explain how our standard of living depends upon our level of real GDP per person,but there might not be a one-to-one relationship between the standard of living and real GDP per person.Give examples of things that can affect one,but not the other.

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Question 13

Explain why the purchase and sale of used goods and of financial assets are not included in the calculation of GDP even though transactions in these items amount to billions of dollars daily.

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Question 14

While studying with your friend,your friend states,"Our leisure time increases GDP but lowers our standard of living because it reduces the amount of goods and services we can consume." Is your friend's statement correct?

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Question 15

Can nominal GDP ever be less than real GDP?

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Question 16

What is "underground production"? Is it included in GDP?

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Question 17

What must be done to net domestic product at factor cost in order to transform it to gross domestic product? Explain why these adjustments are necessary.

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Question 18

What would happen to measured GDP if more people started hiring workers to do household chores such as cooking and cleaning?

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Question 19

Assume a small nation has the following statistics: its consumption expenditure is $15 million,investment is $2 million,government expenditure on goods and services is $1 million,exports of goods and services to foreigners is $1 million,and imports of goods and services from foreigners is $1.5 million.Calculate this nation's GDP.

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Question 20

List and discuss various types of goods and services omitted from measured GDP.

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Quiz 14: Gdp: a Measure of Total Production and Income