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Essentials of Economics

N. Gregory Mankiw

Chapter 15

Measuring a Nation’s Income - all with Video Answers

Educators

Chapter Questions

01:37

Problem 1

Explain why an economy's income must equal its expenditure.

John Coffey
John Coffey
Numerade Educator
06:15

Problem 2

Which contributes more to GDP- -the production of an economy car or the production of a luxury car? Why?

Oluwadamilola Ameobi
Oluwadamilola Ameobi
Numerade Educator
01:54

Problem 3

A farmer sells wheat to a baker for 2 dollar The baker uses the wheat to make bread, which is sold for 3 dollar What is the total contribution of these transactions to GDP?

Oluwadamilola Ameobi
Oluwadamilola Ameobi
Numerade Educator
02:06

Problem 4

Many years ago, Sophie paid 500 dollar to put together a record collection. Today, she sold her albums at a garage sale for 100 dollar . How does this sale affect current GDP?

Brooke Bussoletti
Brooke Bussoletti
Numerade Educator
01:17

Problem 5

List the four components of GDP. Give an example of each.

Kaylee Mcclellan
Kaylee Mcclellan
Numerade Educator
02:00

Problem 6

Why do economists use real GDP rather than nominal GDP to gauge economic well-being?

Oluwadamilola Ameobi
Oluwadamilola Ameobi
Numerade Educator
06:59

Problem 7

In the year 2020 , the economy produces 100 loaves of bread that sell for 2 dollar each. In the year 2021 , the economy produces 200 loaves of bread that sell for 3 dollar. Calculate nominal GDP, real GDP, and the GDP deflator for each year. (Use 2020 as the base year.) By what percentage does each of these three statistics rise from one year to the next?

Oluwadamilola Ameobi
Oluwadamilola Ameobi
Numerade Educator
02:35

Problem 8

Why is it desirable for a country to have a large GDP? Give an example of something that would raise GDP and yet be undesirable.

Prashant Bana
Prashant Bana
Numerade Educator