Question

Last year Country A had a population of 16 million, nominal GDP of 480,000 million, and...

Last year Country A had a population of 16 million, nominal GDP of 480,000 million, and a GDP deflator of 120. Country B had a population of 10 million a nominal GDP of 400,000 million and a GDP deflator of 125. Which country is likely to have the higher standard of living?

A.Country B because it has the higher level of real GDP per person.

B.Country B because it has the higher level of nominal GDP per person.

C. Country A because it has the higher level of real GDP per person.

D.Country A because it has the higher level of nominal GDP per person.

An American company operates a coffeehouse in Lisbon, Portugal. Which of the following statements is accurate?

Use letters in alphabetical order to select options

A.The value of the goods and services produced by the coffeehouse is included in Portuguese GDP, but not in U.S. GDP.

B.The value of the goods and services produced by the coffeehouse is included in both Portuguese GDP and U.S. GDP.

C.The value added by American workers and equipment in Portugal is included in U.S. GDP and the value added by Portuguese workers and equipment is included in Portuguese GDP.

D.The value of the goods and services produced by the coffeehouse is included in U.S. GDP, but not in Portuguese GDP.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

(Question 1) Option (A)

Real GDP (RGDP) = (Nominal GDP / GDP Deflator) x 100

RGDP, country A = (480,000 million / 120) x 100 = 400,000 million

RGDP, country B = (400,000 million / 125) x 100 = 320,000 million

RGDP per person = RGDP / Population

RGDP per person, country A = 400,000 million / 16 million = 25,000

RGDP per person, country B = 320,000 million / 10 million = 32,000

Since country B has higher RGDP per person, country B has higher standard of living. Note that standard of living is mostly measured by RGDP per person.

(Question 2) Option (A)

For US, output of the American company is Portugal is produced outside US. So value of this output is not considered in US GDP. But for Portugal, output of the American company is Portugal is produced within Portugal. So value of this output is considered in Portuguese GDP.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
In 1990 Country X had a GDP of $100 million (measured in U.S. dollars) and had...
In 1990 Country X had a GDP of $100 million (measured in U.S. dollars) and had a GDP of $110 million in 2000 (measured in U.S. dollars), what was the level of economic growth did the country make between 1990 and 2000? A. 10 % B. 40 % C. 10.77 % D. 7.7 % The situation where the buying power of money in terms of goods and services decreases is called: A. deflation. B. inflation. C. stationary pricing. D. hyperinflation....
Year Nominal GDP Economic Growth Workers GDP Deflator Capital Population CPI M1 Inflation (with GDP Deflator)...
Year Nominal GDP Economic Growth Workers GDP Deflator Capital Population CPI M1 Inflation (with GDP Deflator) 2019 $22,000,000 2.10% 100 110 20,000,000 200 300 $4,000,000 1.10% 2069 $384,000,000 2.80% 150 320 60,000,000 300 1200 $40,000,000 2.90% As you might expect from the increase in nominal GDP compared to the increased in the GDP deflator, real GDP grew over these projected 50 years. Also, population growth was modest given the span of 50 years. Will all of this in mind, by...
Inflation reduces the real value of nominal GDP per capita because: A. real GDP is calculated...
Inflation reduces the real value of nominal GDP per capita because: A. real GDP is calculated based on goods and services valued at current prices. B. nominal GDP is calculated based on goods and services valued at current prices. C. inflation is calculated based on goods and services valued at current prices. D. real GDP is calculated based on goods and services valued at constant prices.
Please answer/explain the following 1) Country a has a GDP of $300 billion in a population...
Please answer/explain the following 1) Country a has a GDP of $300 billion in a population of 10 million, while country B has the GDP of $3 trillion in a population of 200 million. The per capita GDP and country and country B are _____ and ______ respectively. a) 15,000; 7,500 b) 15,000; 30,000 c) 30,000; 15,000 d) 7,500; 15,000 2) Consumption is spending by: A) households on capital goods and inventories B) government on subsidizing consumption goods C) business...
The country of Chocolandia was founded by Willy Wonka in 2018. The country has no central...
The country of Chocolandia was founded by Willy Wonka in 2018. The country has no central government. In 2018, Willy Wonka’s chocolate factory invested 550,000 Choco Dollars (C$) in equipment. That same year, the citizens of the newly created country spent C$370,000 on various products, half of which was for domestically produced goods. Finally, the neighboring country of Narnia, Chocolandia’s only trading partner, purchased C$150,000 worth of chocolate products from Chocolandia. Which of the following statements is least accurate? Chocolandia’s...
Real versus nominal GDP Consider a simple economy that produces two goods: cupcakes and muffins. The...
Real versus nominal GDP Consider a simple economy that produces two goods: cupcakes and muffins. The following table shows the prices and quantities of the goods over a three-year period. Year Cupcakes Muffins Price Quantity Price Quantity (Dollars per cupcake) (Number of cupcakes) (Dollars per muffin) (Number of muffins) 2012 1 120 1 195 2013 2 130 4 195 2014 4 130 4 145 Use the information from the preceding table to fill in the following table. Year Nominal GDP...
If real GDP rose from 344 to 350 while nominal GDP rose from 516 to 546...
If real GDP rose from 344 to 350 while nominal GDP rose from 516 to 546 and the GDP deflator rose from 150 to 156, then the rate of inflation is 4.0 percent. Select one: True False Question text Mary rented a house in 2012, paying $850 each month. She could have continued renting at $850 per month in 2013, but took the option of purchasing the house from the owner. She now makes a $1,000 per month mortgage payment....
24.   A measure of GDP in which quantities produced are valued at current-year prices is called:...
24.   A measure of GDP in which quantities produced are valued at current-year prices is called: A. real GDP. B. nominal GDP. C. base GDP. D. physical GDP. 25. In the base year real GDP ______ nominal GDP. A. is greater than B. is less than C. is equal to D. could be greater or less than 28. Bob's Barber Shop cut 3,000 heads of hair in the year 2005 and 3,100 in the year 2006. The price of a...
Discussion #6 – Consumer Price Index (CPI), Productivity and standard of living. The CPI is a...
Discussion #6 – Consumer Price Index (CPI), Productivity and standard of living. The CPI is a measure of the overall cost of the goods and services bought by a typical consumer and it is used to calculate the rate of inflation. The government agency that is responsible for calculating the CPI is the Bureau of Labor and Statistics. The Bureau collects data and compares prices in more than 80,000 items in major metropolitan areas of the U.S. A base year...
1. Nominal GDP increases from year 1 to year 2. Therefore: a.) We produced more goods...
1. Nominal GDP increases from year 1 to year 2. Therefore: a.) We produced more goods and services in year 1 b.) We produced more goods and services in year 2 c.) It is not possible to determine in which year we produced a greater quantity of goods and services 2. Net export spending will have a negative value when the country exports more goods than it imports from other countries. T/F 3. A firm produces 100 units of some...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT