Question

Hi please help with question 3, also check if my answers are correct. I'm not sure about H, that might determine if my final answer is correct or not. Thanks in advance!!! : )

TOE year, taveatment. 5. The following provides completa de l comic activity in Lavaland for years each of the following transactions in one of the escription of all economic activity in Lavaland for year 2018. Place following transactions in one of the four components of expenditure: consumption, investment, government purchases, and net e government purchases and not exports Fill in the parenthesis with X to mark your answer. (5 points) GNX for $8,000 cach.... 80.on Sonsumption...X) ( ) ( ) ( ) b.Jane sold house which was built in 2005 for $160,000 and paid 20% in commission to the real estate agent........... c. Companies spent $500,000 on a new machinery and equipment. X) ( ) ( ) ( ) d. People spent $200,000 on a new computers........... e. Consumers bought 8 new cars for $10,000 each......( X ) ( ) ( ) ( ) f. The state government paid teachers in public schools $150,000. ( ) ( ) x ( ) g. The state goverment sold bonds worth $500,000 to pay teachers in public schools. ............ ) ( ) ( ) ( ) h. Households bought bonds worth $200,000 and paid commission of 10% to the stock dealers.........(X) ( ) ( ) ( ) i. Government paid $400,000 in unemployment benefits.(NOT) INCLUDED IN) GOP) j. Companies were left with $20,000 worth of goods, which were put into inventories at the end of the year..... ) X ) ( ) ( )

Answer 1

Answer)

Part a will not be included in GDP since it involves sale of old cars. GDP includes only sale of goods produced in current year.

Part h will be Investment Expenditure not Consumption Expenditure. Since Households invested in bonds and also paid commission to dealer.

In part b, sale of house built in 2005 will not be included in GDP because GDP takes into consideration only sale of goods produced in current production year. But, commission on sale wil be included in GDP.

Part i and part l are not included in GDP since they are government transfers.

GDP = C+I+G+NX

GDP = $1, 692,000

(if you have any doubts please comment...)

Pasta, Part b, Part c, Partd, Parte, Part 1, part g, Not Included in GDP Consumption Expenditure of $32000 (comminis Investment Expenditure of $5,00.000 Consumption Expenditure of $2,00.000 Consumption Expenditue of $ 80000 - Government Expenditure of $ 150,00 Government Expenditure of $ 50,00 Investment Expenditure of $ 220,000 Not included in GDP Investment expenditure of $25000 Net exports of ($2000 - $30000 = $ - 1000 not included in GDP Consumption Expenditure Parth. Parti, Partj, Partk, Part e, Part m + 8000 C - $ 3 2000 + 200.500 C = $ 312000 + 220,000 + 20,000 I = $ 500,000 I = $ 740,000 G = $150,000 + 500, G = $ 650,00 NX = $ - 10000 GDP = C+I+G + NX = $312000+ 74000 7650000 - Load) = $ 1,692,000