5) Consider the investment component of GDP. Are the following investment? Yes o
ID: 1128612 • Letter: 5
Question
5) Consider the investment component of GDP. Are the following investment? Yes or no? a) Oil used to produce gasoline b) Forkint used in a lumber warehouse The sale of new shares of GM stock c) d) An increase in inventories of com 6) The real GDP of China is greater than that of Sweden. Name one way that the people of Sweden are better off than the people of Chins even though they have a smaller GDP 7) For each of the events below, state which component of U.S, GDP (.e. consumption, investment, govemment spending or net exports) would be affected a) A rise in animal spirits has firms scrambling to increase their productive capacity. b) Unemployment benefits are extended by six months c) Anti-American sentiment has many foreigners boycotting U.S. goods. d) Higher interest rates choke off capital outlays Would the following be made better off or worse off by a spike in unexpected infiation? a) Nellie borrowed $25,000 for her college expenses to be paid off over 15 years b) Frankie spent all his money on U.S. Treasury bonds that will mature in two cl Myma owns an apartment complex where all tenants sign at least a year lease. d) 8) The U.S. govenment is the world's largest debtorExplanation / Answer
5.
A.
It is not an investment as oil is used as input to produce the gasoline.
B.
Forklift is a machine. So, it is an investment.
C.
It is not investment as it is the change of ownership only.
D.
Increase in inventory is considered as investment.
6.
Population of Sweden is lower than the population of China. So, Real GDP per capita of Sweden will be higher than that of China. Hence, real GDP per capita is the way, people of Sweden are better off.
7.
A.
It will increase the consumption as rise in animal spirit, means rise in consumer confidence and it will increase the aggregate demand.
B.
Consumption will increase due to the funds available for spend due to the extension of the unemployment benefits.
C.
Export will come down, so net export will come down due to the boycott of US goods in the international market.
D.
Investments will suffer and come down due to the higher level of interest rates.
Pl. repost other unanswered questions for their proper answers!
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.