Case Situation:
There are probably a thousand macro economic indicators, some measure the overall national economy, some are more limited in scope. The three most often quoted and publicized are the Gross Domestic Production Index (GDP), the Consumer Price Inflation Index (CPI) and the Unemployment Index. Please complete the short answer questions regarding these three indicators:
Value in billions
Personal consumption expenditures $1,000
Gross private domestic investment $500
Net exports $300
Imports $180
Government purchases of goods & services $280
Transfer Payments $90
a) What is the value of GDP?
b) In each of the following cases, indicate if GDP is affected, under what category and what happens to GDP. Be sure to explain why or why it is not included.
- You buy a textbook from one of your classmates
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- A pension payment to a retired military person