What is gross domestic income? GDP\" What is gross private domestic investment.
ID: 2494672 • Letter: W
Question
What is gross domestic income? GDP" What is gross private domestic investment. What is personal income? Personal disposable income? Which of the following are production activities that are included in GDP? Which are not." (See pages 175-178.) Mr. King performs the service of painting his own house instead of paying someone else to do it. Air. King paints houses for a living. Mrs. King earns income from parents by taking baby photos in her digital photography studio. Mrs. King takes photos of planets and stars as part of her astronomy hobby. E*Trade charges fees to process Internet orders for stock trades. Mr. Ho spends SI 0,000 on shares of stock via an Internet trade order and pays a $10 brokerage fee. Mrs. Ho receives a Social Security payment. Ms. Hernandez makes a $300 payment for an Internet-based course on stock trading. Mr. Langham sells a used laptop computer to his neighbor.Explanation / Answer
(8-8)
(a) Not included.
This is an imputed cost since the owner is doing the work himself without hiring outside help. It ahs no standard market value and so, excluded from GDP.
(b) Included.
Since he paints other peoples' houses and earns an income from that, his income is a part of GDP.
(c) Included.
Photohraphy is her profession and her earnings from photography is included in GDP.
(d) Not included.
Hobbies that do not fetch earnings are excluded from GDP.
(e) Included.
This fee is an earning (revenue) for the company, and is included in GDP.
(f) Only the $10 brokerage fes is included in GDP, but $10000 spending on stock is excluded because it is a re-sale of the same stock from one individual to another.
(g) Not included.
Social security payment is a transfer (unilateral) payment by government in exchange of which, government receives no service. So this is excluded from GDP.
(h) Included.
This is an income for the company offering the course, so included in GDP.
(i) Not included.
Sale or purchase of used goods are excluded from GDP.
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