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GDP Quiz1

The document provides examples and questions related to calculating GDP using different approaches. It asks the reader to identify which transactions are included in GDP calculations and classify them by expenditure type. It then asks whether certain events would increase or decrease GDP and if they reflect a similar change in economic well-being. Several problems are presented involving calculating GDP using income and expenditure approaches, defining value added, and solving questions related to nominal and real GDP figures.

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45 views4 pages

GDP Quiz1

The document provides examples and questions related to calculating GDP using different approaches. It asks the reader to identify which transactions are included in GDP calculations and classify them by expenditure type. It then asks whether certain events would increase or decrease GDP and if they reflect a similar change in economic well-being. Several problems are presented involving calculating GDP using income and expenditure approaches, defining value added, and solving questions related to nominal and real GDP figures.

Uploaded by

Away To Ponder
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 4

I.

Theory

1. For each of the following examples, state if you think it is included in the 2010
calculation for the US GDP.
2. A 1962 Camaro sold to a collector in February 2010.
3. A tractor produced by John Deere in May 2010 and sold to a farmer in September 2010.
4. A Buick produced in August 2010 in Shanghai China.
5. A Toyota produced in Kentucky in 2010, but sold to a customer in January 2011.
6. A set of tires produced by Goodyear in 2010 and sold to Chrysler to be put on a 2010
Chrysler 300.

Place each of the following transactions in one of the four components of expenditures: consumption,
investment, government purchases, and net exports.

7. Boeing sells an airplane to the Air Force.


8. Boeing sells an airplane to American Airlines.
9. Boeing sells an airplane to Air France.
10. Boeing sells an airline to a private person.
11. Boeing builds an airplane to be sold next year

Consider how each of the following events is likely to affect real GDP. Do you think the change
in real GDP reflects a similar change in economic well-being? (INCREASE GDP/DECREASE GDP)
12. A hurricane in Florida forces Disney World to shut down for a month.
13. The discovery of a new, easy-to-grow strain of wheat increases farm harvests..
14. Increased hostility between unions and management sparks a rash of strikes.
15. Firms throughout the economy experience falling demand, causing them to lay
off workers.
II. Problem

1.a Calculate the GDP using the Income Approach.

2.b Calculate the GDP using the Expenditure Approach.

Personal Consumption 3,657

Depreciation 400

Wages 3,254

Indirect Business Taxes 500

Interest 530

Domestic Investment 741

Government Expenditures 1,098

Rental Income 17

Corporate Profits 341

Exports 673

Net Foreign Factor Income 20

Proprietor’s Income 403

Imports 704
2.1 Calculate the GDP using the Income Approach.

2.1 Calculate the GDP using the Expenditure Approach.

Household Consumption 10,001.30

Corporate Profits 1,066.60

Investment Expenditures 1,589.20

Indirect Business Taxes 1,001.10

Depreciation 1,861.10

Government Expenditures 2,914.90

Net Foreign Factor Income 146.20

Net Exports -386.40

Wages 7,954.70

Proprietor’s Income 1,030.70

Rents 292.70

Interest Income 765.90

3. A farmer grows a bushel of wheat and sells it to a miller for 1 dollar. The miller turns the wheat into
flour and then sells the flour to a baker for 3 dollars. The baker uses the flour to make bread and sells
the bread to an engineer for 6 dollars. The engineer eats the bread. What is the value added by each
person?

4. Suppose a woman marries her butler. After they are married, her husband continues to wait on her as
before, and she continues to support him as before (but as a husband rather than as an employee):
How does marriage affect GDP? How should it affect GDP?

5. Consider the following table showing the breakdown of GDP (in billions) for Japan.
Consumption 1900
Investment 900
Government Expenditure 200
Exports 10
Imports 40

5.1. What are net exports for Japan.

5.2. Japan’s GDP is:

6. The figures below are the nominal GDP data of a fictitious country for the last five years.
Solve for the Real GDP of each year.
(in million pesos)
Year GDP Deflator Nominal GDP
2015 100.0 4,163,042
2016 205.0 4,781,535
2017 320.0 5,344,084
2018 420.2 6,031,164
2019 520.5 6,648,619

7. In 1995 the NGDP = 100 billion and RGDP = 130 billion. Calculate the GDP deflator for this
economy in 1995.

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