Question 1

Why do economists include only final goods in measuring GDP for a particular year?Why don't they include the value of stocks and bonds sold?Why don't they include the value of used furniture bought and sold?

Question 2

Suppose that in 1984 the total output in a single-good economy was 7,000 buckets of chicken.Also suppose that in 1984 each bucket of chicken was priced at $10.Finally, assume that in 2000 the price per bucket of chicken was $16 and that 22,000 buckets were purchased.Determine the GDP price index for 1984, using 2000 as the base year.By what percentage did the price level, as measured by this index, rise between 1984 and 2000? Use the two methods listed in Table 7.6 to determine real GDP for 1984 and 2000.

Question 3

Why is economic growth important?Why could the difference between a 2.5 percent and a 3.0 percent annual growth rate make a great difference over several decades?

Question 4

Suppose an economy's real GDP is $30,000 in year 1 and $31,200 in year 2.What is the growth rate of its real GDP?Assume that population was 100 in year 1 and 102 in year 2.What is the growth rate of GDP per capita?