1) [3 points] How would the GDP of a country change, if more people in that coun
ID: 2439193 • Letter: 1
Question
1) [3 points] How would the GDP of a country change, if more people in that country starts hiring workers to do house chores such as cooking and cleaning?
Item
Amount
(millions of dollars)
Wages paid
100
Consumption spending
120
Taxes
40
Transfer payments
15
Profits
35
Investment spending
30
Government spending
50
Exports
30
Imports
40
2) [3 points] The table above shows some data for Estonia from last year. Using this data, calculate the country’s GDP.
Item
Amount
(millions of dollars)
Wages paid
100
Consumption spending
120
Taxes
40
Transfer payments
15
Profits
35
Investment spending
30
Government spending
50
Exports
30
Imports
40
Explanation / Answer
1.
GDP of the country will increase, as more people hired for the work of cooking and cleaning will be paid and their earnings for the services delivered, will be counted in the GDP calculation. So, GDP will increase.
2.
GDP = consumption + investment + government spending + (export – import)
GDP = 120 + 30 + 50 + (20-40)
GDP = $180 Million
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