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Unformatted text preview: Econ 314 Prelim 1 (Fall 2008) 1. (6 points) Which of the following events would be included in GDP of year 2000? (Explain your answers) a. Dividends paid by General Motors (registered in the U.S.) to Japanese shareholders; b. Dividends paid by Tokota (registered in Japan) to American shareholders; c. Improved air quality on the campus of Cornell. 2. (15 points). An economy has two final goods, CAR1 and CAR2, and one intermediate good, TIRE. TIRE is used as the material to produce CAR1 and CAR2. CAR 1 is a consumption good. CAR 2 is a capital good. We have the following data from year 2000: TIRE CAR1 CAR2 material 0 $7 $3 wage $6 $2 $9 interest $4 $8 $1 . Each sector earns zero profit. The government purchases $2 of CAR1 and $1 of CAR2. There is no international trade. a. Compute GDP at 2000 by three approaches. b. Find the values of personal consumption expenditures and gross private domestic investment....
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This note was uploaded on 04/02/2009 for the course ECON 3140 taught by Professor Mbiekop during the Spring '07 term at Cornell University (Engineering School).
- Spring '07