Question

omework due at the start of class 4-12. There will be a short quiz that day 13) The owner of an oil well in Texas sells 500 barrels of oil to a refinery in Mexico for $10,000. This transaction 13) A) will increase Gross Domestic Product (GDP) by $10,000. B) has no effect on Gross Domestic Product (GDP) because C) has no effect on Gross Domestic Product (GDP) because the refinery is in Mexico. this is the sale of an intermediate product. decreases Gross Domestic Product (GDP) because oil reserves have fallen by 500 barrels. umpticn expenditures on goods md service Total gor enm ent pending on goods and services Grossprivate domestic in estment Imperts Exports Depredation (capit al con sumption allowance) Net U.S.income earned atroad 1,800 590 365 50 70 200 -75 14) According to the above table, Gross Domestic Product (GDP) is 14) A) $2,465. B) $2,840. C) $2,190. D) $2,750. Gior emm ent sp ending Social Security contributions Corpcratetaces Perscnal income taxes Rent Wages Conaumpticn expenditures Gross Private Domestic Investment 10 20 Indirect busin ess taxes 54 231 250 Imports Interest Gavemment transfer payments 10 40 15) Using the above table, the Gross Domestic Product (GDp) for the country is A) 84. B) 338. C) 746. D) 662 15)

Answer 1

13. The owner of an oil well in Texas sell 500 barrels of oil to a refinery in Mexico for $10,000. This transaction has no effect on Gross domestic product (GDP) because this is the sale of an intermediate good. Hence, option(B) is correct.

14. GDP= C+G+I+NX

= 1500 + 590+ 355 + (70-50)

= $2465.

Hence,option(A) is correct.

15. GDP = C+G+I+NX

= 250+ 50 + 40 + (3-5)

= $338

Hence,option(B) is correct.