Macro Chapter 1 Flashcards
What is the definition of GDP ?
GDP is the total market value of production of all resident producing unit of a country or territory in a specified period
Explain whether the revenue received by a firm selling goods produced in last year be included in GDP.
No because it does not involve current production
Explain whether the prize money to a students with good results in schools be included in GDP.
No, because it does not involve production.
Explain whether the expenditure on buying shares of a listed company be included in GDP.
No, it does not involve production.
State one item that are not included in GDP.
- Expenditure on the purchase of financial assets
- Capital gain
- Welfare payments
- Imported goods
- Value of second hand goods.
- Value of past inventories
- Output that do not have market value
Explain whether the expenditure on imported smartphones by an electronic products retailer be included in GDP.
No, it is not produce by resident producing unit.
Explain whether the value of destroyed product be included in GDP.
No, because it does not have market value.
