simply aren\'t reported to the government), and terna ties (such as pollution) t
ID: 1153529 • Letter: S
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simply aren't reported to the government), and terna ties (such as pollution) that are not fully accounted for in regular production or consumption measures. Higher GDP is often associated with other indicators of hi well-being, such as health, education, and life sati tion, but does not guarantee those things. econonly t ominal Review Questions prices); ither or output, alculated t prices d services 1. U.S. car dealers sell both used cars and new cars each year. However, only the sales of the new cars count toward GDP. Why does the sale of used cars not count? [LO 71 2· There is an old saying,"You can't compare apples and able to compare apples and oranges? Explain. [L? 3. When Americans buy goods produced in Canada, oranges." When economists calculate GDP, are they Canadians earn income from American expenditures Does the value of this Canadian output and American expenditure get counted under the GDP of Canada or the United States? Why? [LO 7.2] Economists sometimes describe the economy as having a "circular flow." In the most basic form of the circu lar flow model, companies hire workers and pay them wages. Workers then use these wages to buy goods services from companies. How does the circular TIo th ulating the sthe overall tio between s have risen al GDP, the have fallen al GDP, the lator allows ng for price fu or In try per 4. model explain the equivalence of the expenditure income methods of valuing an economy? [Lo 7.21 5. In 2011, the average baseball player earned S3 m per year. Suppose that these baseball players s of their income on goods and services each y they save nothing. Argue why the sum of the of all baseball players must equal the sum o ?? nomies and population of gro es in an econ GDP growth al GDP from tures made by the baseball players. [LO 7.2 6. Determine whether each of the following cou consumption, investment, government purch exports, or none of these, under the expenditure a to calculating GDP. Explain your answer. (LO 73 pe y shrinks, the jor indicators in a recession construction of a court house. so, he including its The of a taxicah hiExplanation / Answer
Ans
Because old cars are included in gdp of year in which they were produced
B No. Quality is not comparable but quantity yes by taking monetary values
3 in gdp of Canada because it is addition to national income of xanada
4 because whatever income households receive is equal to expenditure by them on goods and services produced by business.
5 it is very simple. They spend as much as they receive income. Thus both must be equal
6 construction.... Investment
Taxicab. .. Consumption
Other parts aren't visible enough
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