ps_ch18 - PROBLEM SET FOR CHAPTER 18 Measuring National...

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PROBLEM SET FOR CHAPTER 18 Measuring National Output and National Income 1) According to the figure below, Real GDP Y 1 Potential Y 2 Y 3 Actual Y 4 Time 90 91 92 93 94 95 96 Figure 1.1 a) While a ________ (peak/trough) occurred in 1992, a ________ (peak/trough) occurred in 1994. b) Over the years 1990-92, the economy was in a_________ (recession/ expansion) but, over the years 1992-94, the economy was in a_________(recession/ expansion). 2) How do we know that calculating GDP by the expenditure approach yields the same answer as calculating GDP by the income approach? 3) Explain why imports are subtracted in the expenditure approach to calculating GDP? 1
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4) Which of the following transactions would not be counted in GDP? Explain your answers. a) General Motors issues new shares of stock to finance the construction of a plant. b) General Motors builds a new plant. c) Company A succesfully launches a hostile takeover of company B, in which it purchases all the assets of company B. d)
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This note was uploaded on 12/03/2009 for the course INDUSTRIAL IE 307 taught by Professor Arzuakyüz during the Spring '09 term at Atılım Üniversitesi.

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ps_ch18 - PROBLEM SET FOR CHAPTER 18 Measuring National...

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