In the calculation of GDP, what is double counting? How can double counting be avoided when calculating an economy's GDP?
The problem of double counting occurs when the price of both final and intermediate goods is included while calculating the GDP of an economy. This occurs because most goods produced are manufactured in stages by many different companies.
The problem of double counting can be avoided by clearly distinguishing intermediate goods from final goods. Intermediate goods and services are used as components to produce final goods and services, while final goods and services can be used directly by consumers. An economy's GDP is calculated by capturing the value of final products.
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In a closed economy, private saving is equal to which of the following? (Y = GDP, C = Consumption, G = Government purchases, T = Taxes, and TR = Transfers)
A) Y + TR - C - T B) Y - C - T C) Y - G - T + TR D) Y - G - T
Refer to Figure 28-9. Fed Chairman Paul Volcker's response to high inflation of the late 1970s is depicted in the figure above as a movement from
A) A to D to C. B) A to B to C. C) C to E to B. D) C to D to A. E) C to B to A.
Most regional trade and WTO agreements practice
A) the harmonization standards only. B) separate standards only. C) mutual recognition standards only. D) a combination of harmonization, mutual recognition, and separate standards. E) only the standards set out by the WTO.
The earnings difference between men who have never been married and women is
a. significantly less than the earnings difference between married men and women. b. about the same as the earnings difference between married men and women. c. significantly more than the earnings difference between married men and women. d. modestly more than the earnings difference between married men and women.