Consider the following simple economy that produces only three goods 2009 (Base
ID: 1173573 • Letter: C
Question
Consider the following simple economy that produces only three goods 2009 (Base Year) 2017 Product Ouantity Price Qas Denim pants s0 $40 100 50 Wine 8010 20 100 90 11 Textbooks 5 Real GDP in 2017 equals A $3,200 B. 7,800 C. 6,680 D. 5,540 4 5. Which equation represents the relationship between GDP and the four major C. Y- C++G+NX 6. Indicate which component of GDP will be affected by each of the following transactions involving the Ford Motor Company You purchase a new Ford Escape Hybrid from a Ford dealer B. Investment Expenditure D. Net export expenditure E. Not included in GDP calculation 7. An artist buys scrap metal from a local steel mill as a raw material for her sculptures. Last year, she purchased $6,000 worth of scrap metal. With the steel she produced 10 authentic sculptures that she sold for $900 each to a local art dealer. The art dealer then sold all of the sculptures to art collectors for an average of $1,100 each. The total value added of the artist is S. Enter your response as an integer.) A. $9,000 B. $900 C. $11,000 D. $3,000 8. Which of the following is included in the economist's definition of investment?Explanation / Answer
4. Ans: $6,680
Explanation:
Real GDP = Base year price * current year quantity
Real GDP in 2017 = ($40 * 100) + ($11 * 80) + ($90 * 20) = 4000 + 880 + 1800 = $6,680
5. Ans: Y = C + I + G + NX
6. Ans: Consumption Expenditure
Explanation:
You purchase the vechile for self use. So, it is a consusumption expenditure.
7. Ans: $3,000
Explanation:
Value added by artist = ($900 * 10) - $6,000 = $3,000