Billy is a plumber. He earns $15 per hour. One morning, just before he was leaving for work, he found a pipe in his kitchen leaking. He spent two hours repairing the pipe
i) How will this affect the calculation of GDP?
ii) If Billy had spent two hours working for one of his clients, what would have been the effect of his activity on the calculation of GDP?
i) If Billy spends two hours repairing a pipe in his kitchen, he does not receive any monetary payment and his activity does not affect the calculation of GDP. This is because home production is not included in the calculation of GDP.
ii) If Billy had spent two hours working for his clients, GDP would have increased by $15 × 2 = $30.
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a. other sellers are offering similar products. b. buyers exert more control over the price than do sellers. c. these markets are highly regulated by the government. d. sellers usually agree to set a common price that will allow each seller to earn a comfortable profit.
If consumer incomes go up and you are analyzing the market for Harley Davidson motorcycles, the effect on the demand for motorcycles, ceteris paribus, will be
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When government expenditures in a given year are less than tax receipts, there exists
A. a budget deficit. B. public revenue. C. full-employment taxation. D. a budget surplus.