Explain why it is the case that the value of intermediate goods produced and sold during the year is not included directly as part of GDP, but the value of intermediate goods produced and not sold is included directly as part of GDP
Intermediate goods produced and sold during the year are not included separately as part of GDP because the value of those goods is included in the value of the final goods produced from them. If the intermediate good is produced but not sold during the year, its value is included as inventory investment for the year in which it was produced. If inventory investment was not included as part of GDP, true production would be underestimated for the year the intermediate good went into inventory, and overestimated for the year the intermediate good is used or sold.
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According to the income effect, lower prices give people more purchasing power with which to increase the quantity demanded of goods
a. True b. False Indicate whether the statement is true or false
Which of the following groups is most likely to be included in the calculation of real GDP per hour worked?
a. Government workers b. Pensioners c. Workers in multinational corporations d. Farmers
Which of the following would NOT be a part of personal income?
A. retirement checks B. indirect business taxes C. corporate dividend payments to shareholders D. payments received from Social Security
Explain the difference between real and nominal income. How can you get an approximation of the percentage change in real income from one time period to another?
What will be an ideal response?