A farmer sells wheat to a baker for $3. The baker uses the wheat to make bread, which is sold for $5. The total contribution of these transactions to GDP is: Select one: O a. $8 O b. $3 O c. $2 O d. $5
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- What are the main components of measuring GDP with what is demanded?Explain briefly whether each of the following would cause GDP to overstate or understate the degree of change in the broad standard of living. The environment becomes dirtier The crime rate declines A greater variety of goods become available to consumers Infant mortality declinesWhy is the GDP deflator not an accurate measure of inflation as it impacts a household?
- Last year, a small nation with abundant forests cut down 200 worth of trees. It then turned 100 worth of trees into 150 worth of lumber. It used 100 worth of that lumber to produce $250 worth of bookshelves. Assuming the country produces no other outputs, and there are no other inputs used in producing trees, lumber, and bookshelves, what is this nations GDP? In other words, what is the value of the final goods the nation produced including trees, lumber and bookshelves?Which of the following transactions would not be included in the calculation of GDP on the expenditure side? O A. The purchase of a plumber's services by a household. OB. The purchase of an airplane by Air Canada. O C. The purchase of ground beef by McDonald's. D. The purchase of a new boat by a household.A rancher raises sheep. Once a year he shears themn and sells the raw wool to a processor who cleans it and spins it into yarn. The yarn is then sold to a knitting mill, which produces and sells sweaters. In calculating GDP we would count Select one: O a. only the yarn and the sweaters. O b.only the raw wool and the yarn. O c. the raw wool, the yarn and the sweaters. O d. only the sweaters. Next page P eb and Windows
- Suppose an apartment complex converts to a condominium (i.c., the renters become owners of their apartments). What is included in GDP? Select one: O a. The rent was not included in GDP; the purchases are not included either. O b. The rent was included in GDP, and so is the purchase of the condominiums. Oc. The rent was not included in GDP; the purchases of the condominiums are included. Od. The rent was included in GDP; the purchases of the condominiums are not included.Which of the following adds to US GDP? O AI chop down a tree on my property and build a table. A similar table, sold at retail, would get a price of $800. O B. Awake Coffee, a U.S. coffee company, produces a latte in Minneapolis, MN and sells the latte to a customer immediately. O C. All of these answers add to G.D.P. for the United States. O D. Graincorp, a U.S. agricultural company, produces corn syrup at a plant in Chicago. It sells the corn syrup to Crunchy's for use in the production of Hyperactive Crunch. O E. Roadway Motors, a U.S. auto company, produces a car at a plant in Germany. The car is then imported into the U.S.If Ralph pays someone to mow his lawn and Norton mows his own lawn, what is the impact on GDP? a. Neither what Ralph pays nor the estimated value of Norton's mowing is included in GDP. O b. The answer depends on what Norton reports to survey takers. What Ralph pays to have his lawn mowed and the estimated value to Norton of mowing his own lawn are both included in GDP. c. d. Only what Ralph pays to have his lawn mowed is included in GDP.
- QUESTION 12 In the expenditure approach to GDP, which of the following is excluded from measurements of GDP? O A. Government payments for goods produced by privately-owned firms O B. Government payments for goods produced by firms owned by state or local govermments C. Government transfers to households because of Covid-19 O D. All government payments are included in GDPDuring 2008, The rawhide company produced enough rawhide for 1000 dog chews. The dog chew manufacturing company bought 75% of that rawhide for $1500 and promised to buy the remaining 25% for $500 in 2009. The dog chew manufacturing company produced 750 dog chews during 2008 and sold 500 during that year for $5. What was the contribution to GDP for 2008? Select one: O a. $4250 O b. $5250 O c. $5750 O d. $2500 O e. $3750 Next page pageAdditions to inventory O a. Add to next year's GDP when goods are actually sold O b. Add to current year's GDP O C.Are prices at zero since they have not been sold O d. Are simply intoned while calculating GDP