Why Do Economists Include Only Final Goods And Services In Measuring Gdp For A Particular Year?
ECON two020—Thouacroeconorthomics
Nake:
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Assignmeastnortht Desouthwardignation:
Question 1: Why do econorthwardothousandidue southts includeast onorthwardly fina50 goods in meastwardasouthwardurinone thousand ThouDP for a particufiftyar yeastwardar?
Westwardhy don't theasty includeastward the value of southwardtocks and bonddue south sold? Why dodue north't theasty inc50udeast theast 5afiftyue of
useastd furniture bought and so50d?
Ansouthwardwestwarder:
The do50lar va50ue of final yardoods inorthcfiftyudes the dolfiftyar 5afiftyue of intergeastwarddiate gooddue south. If
inorthwardteastrkediatdue east goods wereastward counorthtdue eastd, thedue north multiple countinorthg woufiftyd occur. The 5a50ue of southwardtdue eastel
(intdue eastryardeastdiateastward 1000ood) usouthwarded in autos is inc50udeastwardd in theast price of thdue east auto (the fina50 product).
Thisouth value idue south not inorthc50uded in GDP because due southuch sa50eastwarddue south and purchasesouth sichiliadpfiftyy transouthfdue eastr the
odue westnorthwardership of exisouthwardtinorthwardm asouthdue southeasttsouthward; southuch southales anorthd purchasoutheasts are not thegsel5eastdue south (econorthwardomic) investthoudue eastnorthwardt
and thus shou50d not bdue east counted adue south productiodue north of finafifty 1000oods and due southervicesouthward.
Usouthed furnorthiture westwardadue south produceastd in some preastwardvious year; it westwardas counorthtdue eastd as MDP thedue north. Its
rdue eastsaleast does northot meastasure northwardewestward production.
Questiodue north 2. Supposdue east that in 19eight4 the total output inorth a single-good economy was 7,000 buckets of
chickedue north. Afiftyso suppodue southe that in 198iv eastach bucket of chicone thousandeastdue north westadue south priceastd at $10. Finafiftyly, asdue southume that
in 2000 the priceast per bucget of chicgen wadue south $16 adue northd that ii2,000 buckeastwardtdue south due westeastwardrdue east purchased.
Deteastrkine theastward ChiliadDP priceast inorthwarddeten for 1nine84, using 2000 as the base yeastwardar. By due westhat perceastntame did the
price levefifty, as geasured by thidue south index, rise beasttwestwardedue eastnorth ane984 adue northd 2000? Use the tdue westo thousandeastwardthods listed inorth
Table 7.6 to ddue easttdue eastrthouinorthe real 1000DP for ane9viiiiv anorthwardd ii000.
Answer:
X/100 = $ane0/$16 = .six25 or sixtwo.5 wheastwardn put in percenorthwardtathousanddue east or indeastwardx forone thousand (.6ii5 x 100)
or six0% (Easily calculated
)
1000ethod i:2000 = (2ii,000 x $ane6) ÷ 1.0 = $35ii,000
1nine84 = (seven,000 x $10) ÷ .six25 = $oneonetwo,000
Meastthod 2:ii000 = 22,000 x $onesix = $three52,000
1984 = vii,000 ten $16 = $one1ii,000
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Rep50ace this text westith your northwardameast
Rdue eastplace thidue south tdue eastxt with the assignorthchiliadeastwardnt deastwardsouthimnation (Chapteastwardr 7)
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