solutions - University of California Riverside Econ 103A...

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1 University of California, Riverside Econ 103A Macroeconomic Theory Winter 2008 Solutions for Quiz # 1 1. The income approach measures economic activity by adding up all the incomes received by the producers of output. 2. The product approach measures GDP by adding together the market value of final goods and services newly produced by domestically owned and foreign-owned factors of production within the nation during a specific period of time. 3. The value added of a producer is value of its output minus the value of the inputs it purchases from other producers. 4. Intermediate goods are not counted in GDP because they are completely used up in the production of other goods. 5. Under what conditions will homemaking and child-rearing be counted in GDP ? If these services are provided for pay. 6. Newly produced capital goods are treated as newly produced final goods. 7. A video game company owned by an American, uses American workers and management, is based in Mexico. The value of a new video game developed by the company is counted in
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