1. a.

Gross Domestic Product is the total market value of all final goods and services produced in a given year. b. The expenditures approach to adding up Gross Domestic Product is the method that adds all expenditures made for final goods and services to measure the gross domestic product. c. The formula for GDP is to add up all the spending on final goods and services that has taken place throughout the year. The formula is GDP = c+ lg+ g + Xn 2. a. The difference between gross private domestic investment and net private domestic investment is that, gross means that we are referring to all investment goods, and net private domestic investment includes only investment in the form of added capital. b. In order to determine the net domestic product through expenditures the measure of investment spending I would use is net private domestic investment. c. I would use the net private domestic investment because it is going to take depreciation of capital into account. d. The changes in inventories is included as part of investment spending because if inventory increases, the increase will be due to a part of the income produced in the year and would be considered as an expenditure. 3. a. The difference between nominal GDP and real GDP is that nominal GDP is based on prices that prevail in that year and real GDP measures each year's output in terms of the prices that prevailed in a selected base year. b. The real GDP would be used because the real GDP measures the yearly output and it adjust for price level changes. c. In year 2010 the base year is 2009. 4. a. The government agency that compiles the U.S. NIPA tables is the Bureau of Economic Analysis. b. The Bureau of Economic Analysis is located in the Department of commerce. c. One source for each of the four components of GDP: i. Consumption: The Census Bureau ii. Investment: Housing Sales iii. Government: The Census Bureau Survey of Government Finance iv. Net exports: The U.S Customs Service

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