In calculating GDP, we normally exclude intermediate goods produced and used dur
ID: 1241493 • Letter: I
Question
In calculating GDP, we normally exclude intermediate goods produced and used during the period under question. Explain why it is the case that the value of intermediate goods produced and sold during the year is not included directly as part of GDP, but the value of intermediate goods produced and not sold is included directly as part of GDP.b) Use the data on U.S. real GDP below to compute real GDP per person for each year. Then use these numbers to compute the percentage increase in real GDP per person from 1987 to 2005.
Year Real GDP (2000 prices) Population
1987 $6,435,000 million 243 million
2005 $11,092,000 million 296.6 million
Explanation / Answer
Year - (billions of 2005 $) - Population (in thousands) - Real GDP per capita 1987$7,313.3242,843$30,115 1988$7,613.9245,061$31,069 1989$7,885.9247,387$31,877 1990$8,033.9250,181$32,112 1991$8,015.1253,530$31,614 1992$8,287.1256,922$32,255 1993$8,523.4260,282$32,747 1994$8,870.7263,455$33,671 1995$9,093.7266,588$34,111 1996$9,433.9269,714$34,977 1997$9,854.3272,958$36,102 1998$10,283.5276,154$37,238 1999$10,779.8279,328$38,592 2000$11,226.0282,413$39,750 2001$11,347.2285,294$39,774 2002$11,553.0288,055$40,107 2003$11,840.7290,729$40,728 2004$12,263.8293,348$41,806 2005$12,638.4296,000$42,697 About $13K increase from 1987 per person.
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