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1. a. Consumption. Households spending.
b.
c.
Investment
Consumption. Household spending.
No affect. Already counted in Investment.
d. Consumption. Household spending.
e. Government Purchases. Purchased by California Government.
d. Investment. Money spent on goods to make goods.

2. The government is not purchasing a good or service when they make payments to citizens. Once the citizens use the money then it will
counted in GDP under consumption.

3. Goods that are resold are not counted because then they’d be counted more than once which would make GDP more in ated than it should
be.

4.
a. 2013 Nominal GDP: $200, Real GDP: $200 De ator: 100
2014 Nominal GDP: $400, Real GDP: $400 De ator: 100
2015 Nominal GDP: $800, Real GDP: $400 De ator: 200

b. 2013-2014: 0%
2014-2015: 100%
The prices did not rise from 2013 to 2014. They doubled from 2014-2015.

c. Economic well-being did not rise. It decreased because people has to pay more for the same amount of goods.
t It increased in2014
in2015
5. a. $12, $20, $30
b. $12, $16, $20
c. 100, 125, 150
d. 25%
e. 20%
f. Use the prices and amount of goods to calculate percentage growth and in ation.

6. a. 100 x (15,676/10,642)^1/10 - 1 = 3.95

b. 100 x (115.4/92.2)^1/10 -1 = 25.16
c. 11472
d. 13261.9
e. 1.46
f. The nominal GDP growth rate was higher than real GDP which makes sense because nominal GDP takes in ated prices which would
increase nominal GDP faster than real GDP.

7. Real GDP has increased at a rate of 6.6% in the second quarter of 2021.

8. a. $180 because it is only the nal product the counts in GDP or the GDP would have goods counted twice.
b. $100, $50, $30
c. $180. It is the same as the real GDP. The total amount of value added is a way to calculate GDP.

9. If more people in India make food at home or grow their own food then the US has an advantage in food goods over India.
10. a. It has increased GDP because we now have a greater work force and less unemployment.
b. The rise in well being is much less than the rise in GDP
c. Quality of goods. Maternity leave. It may be practical but abstract to make a well-being measurement.

11. a. $400
b. $350
c. $350
d. $220
e. $150