1. Chapter mazpe08r, Section.232, Problem 080 (ID: 080.23.2-MC- MANKO8) Which of
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1. Chapter mazpe08r, Section.232, Problem 080 (ID: 080.23.2-MC- MANKO8) Which of the following values would be included in U.S. GDP for 2015? a the rent that Sam, an American citizen, would have paid on his home in Houston in 2015 had he not owned that home. o, the rent that Jim, an American citizen, paid on his apartment in San Francisco in 2015. c the value of the legal services provided by Juan, an attorney and a Mexican citizen, who lived in San Antonio an practiced law there in 2015 O d. All of the above would be included in U.S. GDP for 2015Explanation / Answer
1. GDP includes all goods and services produced within the country. Paying rent and legal services within the boundary of the country is included in GDP. So option D is correct.
2. GDP is computed by adding market value of all final good and services produced in the boundary of the country within a specific time period. Option c is correct.
3. GDP uses market price of all goods and services produced within the boundary of a country. Option a is correct.
4. Real GDP is adjusted for inflation. Real GDP=(nominal GDP/ deflator). So real GDP will be increased when nominal GDP is increased keeping price constant. So when output increases, real GDP will be increased. Option b is correct.
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