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Chapter 8: Q.20 (page 188)

In Table 8-1, what is the total dollar amount that is added to the nation's gross domestic product? Why?

Short Answer

Expert verified

The total dollar amount that is added to the nation's gross domestic product is $20trillion.

Step by step solution

01

Introduction

The GDP is the cash worth of every last great and administration delivered inside the domestic region of the country. In a roundabout stream, the all-out financial worth of labour and products and the pay got by individuals are equivalent so we can take one of the sums. The all-out worth of labour and products is generally equivalent to the pay got by individuals.

02

Explanation

The total dollar amount that is added to the nation's gross domestic product is trillion. It is the all-out cash worth of every single last great and administration that are delivered inside the homegrown area of the country.

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Most popular questions from this chapter

Which of the following activities of a computer manufacturer during the current year are included in this year's measure of GDP?

a. The manufacturer produces a chip in June, uses it as a component in a computer in August, and sells the computer to a customer in November.

b. A retail outlet of the firm sells a computer completely built during the current year.

c. A marketing arm of the company receives fee income during the current year when a buyer of one of its computers elects to use the computer manufacturer as her Internet service provider.

Explain what happens to contributions to GDP in each of the following situations.

a. A woman who makes a living charging for investment advice on her Internet Web site marries one of her clients, to whom she now provides advice at no charge.

b. A man who had washed the windows of his own house every year decides to pay a private company to wash those windows this year.

c. A company that had been selling used firearms illegally finally gets around to obtaining an operating license and performing background checks as specified by law prior to each gun sale.

Each year after a regular spring cleaning, Maria spruces up her home a little by retexturing and repainting the walls of one room in her house. In a given year, she spends \(25on magazines to get ideas about wall textures and paint shades, \)45on newly produced texturing materials and tools, \(35on new paintbrushes and other painting equipment, and \)175on newly produced paint. Normally, she preps the walls, a service that a professional walltexturing specialist would charge \(200to do, and applies two coats of paint, a service that a painter would charge \)350to do, on her own.

a. When she purchases her usual set of materials and does all the work on her home by herself in a given spring, how much does Maria's annual spring texturing and painting activity contribute to GDP?

b. Suppose that Maria hurt her back this year and is recovering from surgery. Her surgeon has instructed her not to do any texturing work, but he has given her the go-ahead to paint a room as long as she is cautious. Thus, she buys all the equipment required to both texture and paint a room. She hires someone else to do the texturing work but does the painting herself. How much would her spring painting activity add to GDP?

c. As a follow-up to part (b), suppose that as soon as Maria bends down to dip her brush into the paint, she realizes that painting will be too hard on her back after all. She decides to hire someone else to do all the work using the materials she has already purchased. In this case, how much will her spring painting activity contribute to GDP?

Explain in your own words why the flow of gross domestic product during a given interval must always be equivalent to the flow of gross domestic income within that same period.

Based on the information in Table8.3, in what years was the economy in a recession? Explain briefly.
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