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Chapter 6: Q 13. (page 160)

Would you usually expect GDP as measured by

what is demanded to be greater than GDP measured by

what is supplied, or the reverse?

Short Answer

Expert verified

It would be the same.

Step by step solution

01

Step 1. GDP

Gross domestic product is the value of final goods and services produced in a region in a given period.


02

Step 2. Explanation

Gross domestic product can be measured either by the sum of what is bought into the economy using the expenditure approach or by the income earned over what is produced using the income approach.

Whether GDP is measured by demand or by supply, it should be the same. This is because of every market requires buyers and sellers.

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Most popular questions from this chapter

Cross-country comparisons of GDP per capita

typically use purchasing power parity equivalent

exchange rates, which are a measure of the long-run equilibrium value of an exchange rate. In fact, we used PPP equivalent exchange rates in this module. Why could use market exchange rates, which sometimes change dramatically in a short period of time, be misleading?

Without looking at Table 6.7, return to Figure 6.10. If we define a recession as a significant decline in national

output, can you identify any post-1960 recessions in addition to the 2008-2009 recession? (This requires a judgment

call.)

Fig. 6.10

Why might per capita GDP be only an imperfect

the measure of a country’s standard of living?

In 1980, Denmark had a GDP of \(70 billion

(measured in U.S. dollars) and a population of 5.1

million. In 2000, Denmark had a GDP of \)160 billion (measured in U.S. dollars) and a population of 5.3 million. By what percentage did Denmark’s GDP per capita rise between 1980 and 2000?

The Czech Republic has a GDP of 1,800 billion

koruny. The exchange rate is 25 koruny/U.S. dollar. The Czech population is 20 million. What is the GDP per capita of the Czech Republic expressed in U.S. dollars?
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