The Current State of the Economy

Chapter 23
Questions for Review
1. An economys income is the same as its expenditure because every transaction has both parties: a buyer and a seller. Every dollar go by of several(prenominal) buyer is a dollar of income by some seller. Thus, the transaction contributes equally to the economys income and to the expenditure.
2. gross domestic product is the grocery protect of all the goods and services produced within a solid ground in a certain period of time. Both extravagance cars and an economy car would contrite to gross domestic product. The amount they contribute depends on the final market value. The luxury car usually has a higher(prenominal) market value thus contributing more(prenominal) to the gross domestic product.
3. Since the bread is non a final good it is not include in the GDP because GDP only includes the value of final goods. Thus the $2 sale of wheat does not contribute to the GDP only the $3 of bread does.
4. GDP only includes goods and services currently being produced not items produced in the past. When Peggy pretends $100 for the sale of the record collection she made numerous years ago, the value of the record collection is not included in GDP.
5. Consumption, Investment, Government Purchase, and Net Exports
a. Consumption-spending of goods and services much(prenominal) as automobiles, appliances, food and clothing
b.



Investment-goods purchased to be used in the future much(prenominal) as capital equipment and inventories
c. Government Purchases-spending by local, state, and federal governments such as salaries of government workers as well as existence works
d. Net Exports-purchase of foreign goods such as a planer being sold to British Airways
6. Economists use real GDP vs. nominal GDP because real GDP measures the economys production of goods and services and the economys ability to run into peoples needs and desires. Thus real GDP is a better measure of the economic well-being.
7. (write in)

8. A higher GDP would indicate a higher income and expenditure because almost people would receive a higher income...If you want to get a full essay, order it on our website: Ordercustompaper.com



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