Question

your final answers. 1. For each part use the expenditures approach to indicate how the following actions affects () for the current year. (Do not assume anything "special" beyond what's mentioned in the 0 Consumption,(ii) Investment, (ii) Government Purchases, (iv) Net Exports, and (v) GDP question). (a) An Apple Store has 500 currently produced iPhones at $200 each. By the end of the year it has sold 300 of these iPhones to consumers. The government buys 50,000 computers at $1000 each for public schools, $1,000,000 of army tanks produced in the current year by a domestic manufacturer, S500,000 of uniforms produced in South Korea, and spends $300,000 on unemployment benefit payments. (b) 0 Wal-Mart spends $10 million to build a new department store. Included in this $10 million are $5.5 million of currently produced domestic materials, $3 million of steel produced in the previous year by a U.S. steel mill, and $1,500,000 of wood produced from trees in Brazil. (c) A flour mill sells 200 lbs of flour to a bakery at $2 per lb. By the end of the year 150 lbs of that flour has been used to make 500 loaves of bread sold to consumers at $1.50 each. (d) Four years ago you purchase a new house for $350,000. In the current year, following the collapse of the housing market, you are only able to sell this house for $300,000, you pay your real estate agent a 5% commission assisting you with this sale. You purchase a newly constructed condo for $150,000. (e)

Answer 1