quanda23 - Chapter 23 1 a Complete the following table...

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Practice Questions to accompany Mankiw & Taylor: Economics 1 Chapter 23 1. a. Complete the following table. Answer: b. What is the largest expenditure component of GDP? Answer: Consumption c. Does investment include the purchase of company shares and bonds? Why? Answer: No, because that transaction is a purchase of an asset, not a purchase of currently produced capital goods. d. Do government purchases include government spending on unemployment benefit? Why? Answer: No, because unemployment benefits are expenditures for which the government receives no production in return. e. What does it mean to say that net exports are negative? Answer: It means that imports exceed exports. 2. Suppose the base year in the following table is 2004. a. What is nominal GDP for 2004, 2005, and 2006? Answer: €100, €200, €400
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Practice Questions to accompany Mankiw & Taylor: Economics 2 b. What is real GDP for 2004, 2005, and 2006? Answer: €100, €100, €100 3. Suppose the following table records the total output and prices for an entire economy. Further, suppose the base year in the following table
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