Section+Exercise+14+solns - DepartmentofEconomics 2011

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

View Full Document Right Arrow Icon
Department of Economics               Spring  2011 University of California, Berkeley         Economics 1    Head GSI: Swetha  Doraiswamy Section Exercise 14 1) For each activity listed below, indicate where the activity would be recorded on the  expenditure side of GDP accounting. Your choices are C (consumption), I (investment), G  (government), EX (exports), IM (imports), and NR (not recorded). Give a brief explanation  of each answer. a. You buy a new CD, manufactured in California, at Tower Records. C . You are (part of) a household, buying a final good. b. You buy a used CD at a local music shop. Mostly not recorded, but there is an entry in consumption. The markup the store charges  on the used CD is recorded in  C , but the rest is not recorded. If the shop bought the CD for  $5 from Roshanda and sold it for $8 to Imani, then $3 (=$8-$5) is in consumption and $5  is unrecorded. c. You buy a used bookcase at a garage sale. NR . This is just a transfer of assets between to households; nothing was produced. d. Tower Records buys new permanent CD display racks that were manufactured in North  Carolina. I . The racks are permanent; they are not used up in the process of producing the final  product, CDs for sale to consumers. e. Tower Records buy paint with which to paint sale signs on the windows. NR  because the paint is an intermediate good. It is an input that is used up in the process  of producing the final product, CDs for sale to consumers.  f. The City of Ann Arbor, Michigan, buys new parking meters that were manufactured in 
Background image of page 1

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

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/26/2011 for the course ECON 1 taught by Professor Martholney during the Fall '08 term at University of California, Berkeley.

Page1 / 3

Section+Exercise+14+solns - DepartmentofEconomics 2011

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