In the realm of microeconomics rather than

In the realm of microeconomics rather than macroeconomics
o Scientists
o Policy advisers
o In the realm of normative economics rather than positive economics
 A statement describing how the world is
o Is a positive statement
o Would only be made by an economist speaking as a policy adviser
o Is a normative statement
o Would only be made by an economist employed by the government
 GDP is defined as the

o Value of all final goods and services produced by the citizens of a country,
regardless of where they are living, in a given period of time
o Value of all goods and services produced by the citizens of a country,
regardless of where they are living, in a given period of time
o Value of all goods and services produced within a country in a given
period of time
o Value of all final goods and services produced within a country in a
given period of time
 When economists refer to intangible items, they are referring to such things as
o Illegal goods, and the value of such items is included in GDP
o Illegal goods, and the value of such items is excluded in GDP
o Hair styling and dental care, and the value of such items is included
in GDP
o Hair styling and dental care, and the value of such items is excluded from
GDP
 Fine Edge manufactures lawn mowers. At the end of 2014 it had $2 million worth
of lawn mowers in inventory. In 2015 it sold $10 million worth of lawn mowers to
consumers and had $1 million worth of lawn mowers remaining in inventory at
the end of the year. How much did the lawn mowers produced by Fine Edge add
to GDP in 2015?
 Suppose a country has government expenditures of $3,500, taxes of $2,200,
consumption of $9,000, exports of $2,500, imports of $2,700, transfer payments
of $750, capital depreciation of $800, and investment of $3,000. GDP equals
 How can economists who agree on the science/economics of an issue
recommend different policy prescriptions?
 Explain how we treat the production of goods produced in year 1 but sold in year
2 when calculating GDP.