eco 192 Chapter 23 part A study guide/problem set İAÜ

Spring term 2020 Doçent Dr S.J. Terregrossa, PhD

1) During the production process of goods and services produced within the nation during
2019, the total income generated is as follows:
a) Salaries and wages to households providing labor (L): 500,000 ;
b) Profit and rent to households providing capital and land (K,T): 5,000,000 .

Based on the above information, determine the value of nominal GDP.

Thoroughly explain your answer.

2) During 2019 nation Z produced only 10 goods. Goods A,B,C, D and E are intermediate goods.
Goods F,G,H,I and j are final goods.

The intermediate goods (A, B, C, D and E) are used in the production of the final goods (F, G,
H, I and J).

The quantities produced and sold of each good in 2019 are as follows:
QA= 50 units; QB= 40 units; QC= 60 units; QD= 70 units; QE= 30 units; QF= 40 units; QG= 60 units;
QH= 50 units; QI= 30 units; Qj= 70 units.

The 2019 market prices of each good are as follows:

PA= 20 ; PB= 30 ; PC= 60 ; PD= 50 ; PE= 40 ; PF= 30 ; PG= 20 ; PH= 50 ; PI= 40 ; PJ= 30 .

Based on the above information, determine the value of nominal GDP.

Thoroughly explain your answer.

3) In 2019:
a) Total expenditure on final goods and services by households (C) in country A = 800 ₺; of
which 200 ₺ are expenditure on final goods and services produced in other countries;
b) Total expenditure on final goods and services by firms (I) in country A = 900 ₺; of which
400 ₺ are expenditure on final goods and services produced in other countries;
c) Total expenditure on final goods and services by government (G) in country A = 800 ₺; of
which 200 ₺ are expenditure on final goods and services produced in other countries;
d) Total expenditure on final goods and services produced in country A and purchased by
citizens from other countries (X) = 2,000 ₺.

Based on the above information, determine the value of nominal GDP.

Thoroughly explain your answer.