Marcoeconomics Problem set 5 Questions

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Problem set #1

1) If Joan receives a Social Security check, would we include that transfer payment from the government in this year’s GDP? Why or why not? 

2) In the following situations, explain what is counted in this year’s GDP:

A. You bought a new Wii at GameStop last year and resold it on eBay this year

B. You spend your Saturday cutting grass at your house

C. You purchase an Investing for Dummies book at Barnes and Noble

D. You purchase a historic home using the services of a real estate agent

E. You purchase a tire to replace the damaged tire on your car

3) To which component of GDP expenditure (C, I, G, or NX) does each of the following belong? 

a. a new home

b. a parachute purchased by the US. Army

c. wheat imported from Canada

d. a cheeseburger you purchase for lunch

4) Many goods and services are illegally sold or legally sold but not reported to the government. How would increased efforts to count those goods and services affect our calculation of GDP?  Would it increase, decrease or stay the same? Why? 

5) Fill in the missing data in the following table: (Round to the nearest dollar)

  

Year


Nominal GDP


Real GDP


GDP Deflator

 

2009


100000



93

 

2010



117000


100

 

2011


125000


120000


 

2012


150000



119

 

2013



152000


136

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