1 why does the gdp omit government transfer payments

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Unformatted text preview: s to the following questions to review the main ideas in this chapter. 1. Why does the GDP omit government transfer payments? 2. What is the difference between GDP and GNP? 3. Why does GDP omit illegal transactions? 4. Why does GDP omit stock transactions? 11 (286-309) EMC Chap 11 12/5/05 2:15 PM Page 309 5. What is the difference between an intermediate Working with Graphs good and a final good? 6. Why does an economist prefer to work with real and Tables GDP figures over GDP figures? Look at Exhibit 11-12. Fill in each blank, (a) 7. Which spending component of GDP is the through (f), with the correct dollar amount. largest? 8. What happens to GDP if import E X H I B I T 11-12 spending rises and no other spending component of GDP changes? Goods Goods in Price in Price in Base-year Base-year Price in Price in Current-year Current-year 9. What is the unemployment rate? market basket base year expenditure current year market basket base year expenditure current year expenditure expenditure The employment rate? 10. Is it possible for the unemploy10 10 X $4 $4 (b) (c) $50 $50 ment rate to rise as the number of 12...
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