MT445 MT 445 unit 7 assignment (Graded A+) - 37222

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a.    Does your answer change if the company in China is a U.S.-owned company?  Why or why not?

   1.   Which component of GDP will be affected by each of the following transactions involving FlyCheap Airlines?  If you do not believe any component will be affected, briefly explain why.

   2.   Use the table to answer the following questions.

Year

Real GDP (Billions of 2000 Dollars)

1993

$7,113

1994

7,101

1995

7,337

1996

7,533

1997

7,836

   3.   In an open economy, trade is allowed between countries.  Assume a consumer purchases $1,000 worth of furniture manufactured in China.  Answer the following:

b.    Which component(s) of GDP are impacted by this purchase?

c.    Does GDP increase, decrease or stay the same?  Briefly explain why.

 

   4.    Why does inflation make nominal GDP a poor measure of the increase in total production?

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A+++++++++++++

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23 feb due.doc
23 feb due.doc