Chapter 8: Q.b - For Critical Thinking (page 171)
Why might a range of dashboard economic indicators be difficult to include in one single measure such as GDP?
It will prompt more assessment issues as these pointers are dissimilar to labour and products don't have a market cost which makes their valuation simple.
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Each year, Johan typically does all his own landscaping and yard work. He spends per year on mulch for his flower beds, per year on flowers and plants, on fertilizer for his lawn, and on gasoline and lawn mower maintenance. The lawn and garden store where he obtains his mulch and fertilizer charges other customers for the service of spreading that much mulch in flower beds and for the service of distributing fertilizer over a yard the size of Johan's. Paying a professional yard care service to mow his lawn would require an expenditure of per year, but in that case Johan would not have to buy gasoline or maintain his own lawn mower.
In the first stage of manufacturing each final unit of a product, a firm purchases a key input at a price of \(4 per unit. The firm then pays a wage rate of \)3 for the time that labor is exerted, combining an additional \(2 of inputs for each final unit of output produced. The firm sells every unit of the product for \)10. What is the contribution of each unit of output to GDP in the current year?
Discuss the key components of national income.
Explain what happens to the official measure of GDP in each of the following situations.
a. Air quality improves significantly throughout the United States, but there are no effects on aggregate production or on market prices of final goods and services.
b. The U.S. government spends considerably less on antipollution efforts this year than it did in recent years.
c. The quality of cancer treatments increases, so patients undergo fewer treatments, which hospitals continue to provide at the same price per treatment as before.
What is the percentage increase in China's per capita GDP when one switches from foreign exchange rates to purchasing power parity?
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