Chapter_6_Key_Question_Solutions

Chapter_6_Key_Question_Solutions - 6-3(Key Question) Why do...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 6-3(Key Question) Why do economists include only final goods in measuring GDP for a particular year? Why dont they include the value of stocks and bonds sold? Why dont they include the value of used furniture bought and sold?The dollar value of final goods includes the dollar value of intermediate goods. If intermediate goods were counted, then multiple counting would occur. The value of steel (intermediate good) used in autos is included in the price of the auto (the final product).This value is not included in GDP because such sales and purchases simply transfer the ownership of existing assets; such sales and purchases are not themselves (economic) investment and thus should not be counted as production of final goods and services.Used furniture was produced in some previous year; it was counted as GDP then. Its resale does not measure new production.6-8(Key Question) Below is a list of domestic output and national income figures for a given year. All figures are in billions. All figures are in billions....
View Full Document

Page1 / 2

Chapter_6_Key_Question_Solutions - 6-3(Key Question) Why do...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online