Homework 1 Solutions Econ 3040 Intermediate Macroeconomic Friday January 30, 2015 Review 1. What are the three approaches to measuring economic activity? Why do they give the same answer?
4. How does GDP differ from GNP? If a country employs many foreign workers which is likely to be higher: GDP or GNP?
Numerical 4. For each of the following transactions, determine the contribution to the current year's GDP. Explain the effects on the product, income, and expenditure accounts. a.On Jan 1, you purchase 10 gallons of gas at $2.80 per gallon. The gas station purchased the gas the previous week at a wholesale price (transportation included) of $2.60 per gallon.