Which component of gdp includes spending on new structures

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Reference no: EM132207831

Question: 1. Part 1: Consumption is $5.5 trillion, investment is $1 trillion, government expenditures are $1.5 trillion, transfer payments are $.5 trillion, exports are $.75 trillion and imports are $1.25 trillion. What is GDP?

Part 2: Which component of GDP includes spending on new structures and equipment?

Part 3: Which component of GDP reflects the purchase of a mint condition used 1968 Ford Mustang? Explain your answer.

Part 4: In terms of GDP calculation, what are intermediate goods? Why is the value of intermediate goods not included in GDP?

The small nation of Hoopheadia is obsessed with basketball. Hoopheadia only produces and consumes basketballs and basketball nets. These two products are produced and consumed in the following amounts:

	Basketballs	Basketball Nets
2016	Quantity:20 Price:$30	Quantity:50 Price:$5
2017	Quantity:30 Price:$35	Quantity:60 Price:$6
2018	Quantity:25 Price:$40	Quantity:50 Price:$7

Part 5: Using a method similar to the CPI, compute the percentage change in the overall price level from 2017 to 2018. Use 2017 as the base year and fix the basket at 2 basketballs and 5 basketball nets.

Part 6: Using a method similar to the GDP deflator, compute the percentage change in the overall price

level from 2018 to 2017. Also, use 2017 as the base year.

Part 7: Is the inflation rate in 2018 the same using the two methods? Explain why or why not.

Reference no: EM132207831

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