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Questions and Answers
What does GDP include according to the text?
What does GDP include according to the text?
- The value of both intermediate and final goods
- The value of intermediate goods
- The value of final goods only (correct)
- The value of raw materials
Why are intermediate goods not included in GDP?
Why are intermediate goods not included in GDP?
- Their value is already included in the price of final goods (correct)
- To keep the GDP calculation simple
- Intermediate goods are difficult to measure accurately
- Because they are less valuable than final goods
How is the value added of a firm calculated?
How is the value added of a firm calculated?
- By dividing the output value by the number of employees
- By subtracting the value of intermediate goods from the output value (correct)
- By adding the value of intermediate goods to the output value
- By multiplying the output value with the price per unit
What would happen if intermediate goods were included in GDP calculations?
What would happen if intermediate goods were included in GDP calculations?
In the case of the hamburger example, what is the total value added?
In the case of the hamburger example, what is the total value added?
Why is it important to include only final goods in GDP calculations?
Why is it important to include only final goods in GDP calculations?
What term is used to describe an estimate of the value of goods and services not sold in the marketplace?
What term is used to describe an estimate of the value of goods and services not sold in the marketplace?
Why does GDP include imputed rent for homeowners who own their homes?
Why does GDP include imputed rent for homeowners who own their homes?
Which group provides services that are difficult to assign a value to because they are not sold in a marketplace?
Which group provides services that are difficult to assign a value to because they are not sold in a marketplace?
How is imputed rent for homeowners included in GDP calculations?
How is imputed rent for homeowners included in GDP calculations?
What is the purpose of using imputations in valuing government services?
What is the purpose of using imputations in valuing government services?
Why is it necessary to estimate the value of goods and services not sold in the marketplace for GDP calculations?
Why is it necessary to estimate the value of goods and services not sold in the marketplace for GDP calculations?
Which of the following is NOT included in GDP calculations?
Which of the following is NOT included in GDP calculations?
What is the underground economy?
What is the underground economy?
Why are imputations not made for certain services like meals cooked at home?
Why are imputations not made for certain services like meals cooked at home?
What happens if imputations for all services and goods were made in GDP calculations?
What happens if imputations for all services and goods were made in GDP calculations?
Why is GDP considered an imperfect measure for comparing standards of living across countries?
Why is GDP considered an imperfect measure for comparing standards of living across countries?
In which type of economy is the underground economy estimated to be more than half as large as the official economy in some countries?
In which type of economy is the underground economy estimated to be more than half as large as the official economy in some countries?
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