GDP

Question 1

why transfer of payment is not counted in GDP

Answer 1

there is no corresponding production

Question 2

is the estimated rental value of an owner occupied property in Hong Kong included in the calculation of GDP

Answer 2

yes

it is the private consumption expenditure in Hong Kong.

Question 3

is the capital gain earned by a Japanese a net income payable to aboard?

Answer 3

NO
captial gain=/= income (production)
income is wage profit interest rent

Question 4

why sometimes the contribution to GDP of one investment is lower than the value of investment

Answer 4

raw materials in the investment are imported so they are not current production of Hong Kong

raw materials in the investment are from past inventories so they are not current production of Hong Kong

Question 5

40 million of japan TV sets are smuggled from HK to China

whole 40 million included in HK GDP?

Answer 5

No
part of them is not produced in Hong Kong
part of them is unreported transaction

Question 6

would destoyed products be included in GDP

Answer 6

no
not sold in the market and thus not counted in production (output approach)
because it neither counted in consumption nor investment (expenditure approach)

Question 7

should sewage charges include in GDP

Answer 7

yes

it is the payment for the services provided by the government

Question 8

why value added approach will not lead to double counting

Answer 8

input cost is deducted at every stage of production

Question 9

why expenditure approach will not lead to double counting

Answer 9

only the expenditures on final goods and services are summed up

Question 10

should the payment of the shares be included in GDP

Answer 10

no
its just a transfer of ownership of existing asset
it does not relate to any current production

Question 11

table: private consumption expenditure: 400 million

why real consumption must be higher than 400 million

Answer 11

spent money on secondhand good
there are unreported transaction
spent money on goods which are classified as investment expenditure (such as new flat)
consumers down payment for goods produced in future years

Question 12

why the contribution of the export firms to GDP could be smaller than the total export value of this firm

Answer 12

Firm A’s contribution is the value added by A to the production. Other firms’ contribution in the production process should have been deducted

the total export value may have included part of the inventory in past years

Question 13

currency appreciate

GDP increase?

Answer 13

no

capital gain does not involve production

Question 14

why the daily economic loss under typhoon day is less than average GDP per day

Answer 14

some production activities are still undergoing
some production activities are generated like emergency service during typhoon
some production activities disrupted during typhoon can be compensated later

Question 15

when export value decrease

why the total decrease in GDP may be larger than that value

Answer 15

spillover effect (no need to know this term)
the decrease in income because of decreasing export value will lead to a decrease in private consumption expenditure

Question 16

can gross domestic fixed capital formation be negative

Answer 16

no

頂盡0

Question 17

will HK’s GDP be affected by the transaction of second-hand goods

Answer 17

yes

the services of property agents , bank, lawyer, and the government adds value to the GDP

Question 18

when the value of re-export > value of domestic export

is it a must that re-export contribute more to the national income of Hong Kong than domestic exports?

Answer 18

No

The contribution to the national income depends on the value-added

For domestic exports of goods, Hong Kong adds value onto the imported raw materials and semi-manufactured goods mainly by providing labour services.

For re-export, Hong Kong earns income from providing services to the re-export trade

The income earned from domestically-produced goods for exports can be smaller or greater than that from servicing re-exports

eg import value for re-export 250
reexport value 300
then value added only 50

Question 19

is charity donation a production

Answer 19

no

Question 20

how the smuggling of gasoline affect the GDP

Answer 20

smuggled gasoline has no official record in the GDP figures
and the sales of petroleum companies decrease
GDP decreases

Question 21

when sales revenue decreases by 200 million

why the reduction in that part of GDP contributed by the agency is less than 200 million

Answer 21

the value of import bought by this firm for its production

the value of output of other firms in HK that are bought by this firm for its production (intermediate good)

Question 22

why top-quality mainland students staying in hk can increase hk’s potential gdp

Answer 22

larger labour force
top-quality mainland students have a higher productivity
top-quality students can increase the productivity of the local employees when they work together

Question 23

why tourist buying imported souvenir can improve the current account

Answer 23

imported souvenir will decrease the current balance
the souvenirs sold to inbound tourist increase
the decrease in the current account balance is smaller than the increase in the current account balance
there is value added to the souvenir by local service provider