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practicequestions3spring2004 - Economics 102 Spring 2004...

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Economics 102 Spring 2004 Practice Questions 3 1. Which of the following transactions are included in GDP, and what is the contribution of each to GDP? If it is not part of GDP why? a) You hire a plumber for $1,500 to install new bathroom fixtures. b) You spend $700 dollars on the new fixtures for your bathroom but do the installation yourself. A plumber would have charged $800 for the installation. c) A carpenter purchases $700 worth of wood to be used at some point in the future. d) I purchase a used condo from you for $70,000. You then purchase a new house for $150,000. e) Ozzy purchase a 1965 Fender Stratocaster guitar from his friend for $2,000. f) Ozzy also purchases a new Yamaha keyboard for $1,500. g) I. N. Vestor ears $70,000 by buying and selling IBM stock. h) Hyasynth Roller wins $1,500 at the Ho Chunk casino. i) You trade in your used car valued at $4,000 and purchase one worth $25,000. j) You knit a sweater worth $40 and give it away as a gift. k) A car deal sells a new 2002 model car in 2003 for $25,000. 2. Use the following information to calculate GDP using both the expenditure approach and the factor payments approach. a) There are three types of businesses; MTR Cars (an automobile manufacturer), Lots o’ Food (a super market chain), and many family farms.
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