ratit he te wreh yon Sthomit your Work. You must show work to get credit. Your s
ID: 1147258 • Letter: R
Question
ratit he te wreh yon Sthomit your Work. You must show work to get credit. Your score is based on your explanation. Problem 1 Your friend Lily bought a newly built house last year. She plans to sell the house this year. After learning that you are studying Economics, Lily says, "If I sell my house today, I will contribute to our country's GDP." Comment on your friend's statement. (Is Lily right? Why or why not?) Problem 2 Suppose Lewis is a country located in the Pacific Ocean. Its economy relies heavily on tourism. The majority of the hotels and resorts in Lewis are owned by foreign countries. Which do you think is larger, Lewis' GDP or GNP? Explain why. Problem 3 Table I: Components of Expenditure in the U.S. (hypothetical values). All figures are in billions of dollars Durable goods Nondurable goods Services Business investment Residential investment Change in business inventories Federal spending State spending Exports Imports 659.3 1592 3234.5 846.9 327.2 68.4 523.8 928.9 957.1 1058.1 1/2Explanation / Answer
Problem-1
It will not be included in GDP because it is resale of a good. The good was already included while calculating last year GDP.It won't be included this year.
Problem 2
GDP refers to and measures the domestic levels of production in a country. It represents the monetary value of all goods and services produced within a nation's geographic borders over a specified period of time.
GNP measures the levels of production of all the citizens or corporations from a particular country working or producing in any country. For example, the American GNP measures and includes the production levels of any American or American-owned entity, regardless of where in the world the actual production process is taking place, and defines the economy in terms of the citizens output.
The GDP of this country will be higher because goods produced within the territory of lewis is higher.
What is to be calculated in problem 3?
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.