PROBLEMS AND APPLICATIONS

PROBLEMS AND APPLICATIONS 1. What components of GDP (if any) would each of the following transactions affect? Explain. a. A family buys a new refrigerator. b. Aunt Jane buys a new house. c. Ford sells a Mustang from its inventory. d. You buy a pizza. e. California...

QUESTIONS FOR REVIEW

QUESTIONS FOR REVIEW 1. Explain why an economy’s income must equal its expenditure. 2. Which contributes more to GDP the production of an economy car or the production of a luxury car Why? 3. A farmer sells wheat to a baker for $2. The baker uses the wheat to...

CONCLUSION

CONCLUSION This chapter has discussed how economists measure the total income of a nation. Measurement is, of course, only a starting point. Much of macroeconomics is aimed at revealing the long-run and short-run determinants of a nation’s gross domestic...

WHO WINS AT THE OLYMPICS

WHO WINS AT THE OLYMPICS Every four years, the nations ~f the world compete in ‘the Olympic Games. When the games end commentators use the number of-medals a national take~home as ‘a measure of success. This measure seems very different from the GDP...