Give an example of a good that would be included in the GDP and another good that would not be included in the GDP. Explain why one would be included and the other wouldn’t. Avoid using examples given in the text.
What will be an ideal response?
Examples will vary but should show an understanding of why goods are included
or excluded from the GDP. For example, a brand new bicycle for sale in a store would
be included in the GDP. The reason is that it is a final product that is ready for its
designated, ultimate use. Also, it is new, not used. The GDP includes only new
products. However, the aluminum used to make the bicycle would not be included in the
GDP. Aluminum is considered to be an intermediate good. Counting intermediate goods
leads to double counting, counting the raw material as well as the finished product that
uses this material. Doing this would make the GDP inaccurate.
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Data on output and aggregate expenditure in Macroland are given below.Output(Y)Aggregate Expenditure1,0001,7502,0002,5003,0003,2504,0004,0005,0004,750Based on these data, the short-run equilibrium level of output is:
A. 5,000. B. 2,500. C. 4,000. D. 1,000.
According to data on GDP growth between 1980 and 2010,
a. poor nations stagnated, while the rich nations continued to grow. b. poor nations grew rapidly, while the rich nations stagnated. c. most of the world's rapidly growing countries were located in Africa. d. many poor nations grew more rapidly than wealthy nations, while others continued to stagnate.
Usually an abundance of natural resources ________ average labor productivity.
A. doubles B. increases C. has no effect on D. decreases
As of 2015, the federal budget deficit was about ________ of GDP, and ________ of the deficit came from interest payments on federal debt.
A. 50 percent; almost none B. 50 percent; almost all C. 2.5 percent; almost all D. 2.5 percent; about half