Gross domestic product constitutes a the total quantitative output in an economy
ID: 1165567 • Letter: G
Question
Gross domestic product constitutes a the total quantitative output in an economy b the current market value of all goods and services produced in a given year. e. the total spending in an economy d. the total monetary transactions in an economy e the current market value of all final goods and services produced in a given year within a 26. country's borders 27. Intermediate goods and services a are not included in calculating GDP using the value-added method. b are goods and services produced in the last year but sold in this year. e. are goods and services used as an input for the production of final goods and services d. are goods and services purchased for ultimate consumption. e are goods and services produced this year but not yet sold Figure 5-1 The Production of a Corvette Sales Value S1,500 $2,350 $19,700 $36.000 Production Stage Steal Co. sells the raw material Motor Inc. sells the engine to GMC Dealer buys car form GMC Dealer sells car (retail) 28. According to Figure S-1, the contribution to GDP from the production of this car is a. $2,350 b. $16,300 c. $19,700. d. $36,000 e. $59,55o. 29. What is the importance of not including intermediate goods when calculating GDP Avoiding single product counting a. b. Restricting GDP to important goods Keeping the consumer price index constant e. d. Avoiding double counting e. Restricting GDP to goods that can be priced 30. Consider GDP calculated as expenditures. GDP would increase if a. imports decreased b. consumption decreased. e. exports decreased d. investment decreased e government spending decreasedExplanation / Answer
26.
The gross domestic product is the current market value of final goods and services produced by a country in a year within a country's borders.
the correct option is (e)
27.
Intermediate goods and services are inputs used in the production of final goods and services.
the correct option is (c)
28.
GDP, in this case, is adding all the values as it is a vertically integrated production where the first raw material is sold to manufacturer then manufacturer to dealer and finally dealer sells to a retailer. All of them accrues income to the factors of production hence will be summed up to calculate GDP.
the correct option is (e)
29.
Importance of not including intermediate goods implies one avoids double counting of the value of the good.
the correct option is (d)
30.
GDP as expenditure can be shown using the expenditure method as
GDP= C+I+G+NX
where NX=X-M
NX is net exports and equals exports minus imports. Hence when imports decrease then GDP rises.
the correct option is (a)
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