Chapter 7, Critical Analysis Questions, Due Midnight, Wednesday, 11/9/16
Please complete Chapter 7 Critical Analysis Questions: 1, 2, 3, 5, 6, 8, 10, 11, 15, and 16.
(#17) Also find the current values for these two measures and identify the source where
you found them. 1. the Consumer Price Index, and 2. U.S. Gross Domestic Product
1. *Indicate how each of the following activities will affect this year’s GDP:
a. the sale of a used economics textbook to the college bookstore
b. Smith’s $500 doctor bill for setting her son’s broken arm
c. family lawn services provided by Smith’s 16-year-old child
d. lawn services provided by Smith from his neighbor’s 16-year-old child who has a lawn-
mowing business
e. a $5,250 purchase of 100 shares of stock at $50 per share plus the sales commission of
$250
f. a multibillion-dollar discovery of natural gas in Oklahoma
g. a hurricane that causes $10 billion of damage in Florida
h. $60,000 of income earned by an American college professor teaching in England
a,c,f,c,g, and h will exert no effect on GDP; b and d will increase GDP by the amount of the
expenditure and e will increase GDP by $250
2. If nominal GDP increased by 6 percent during a year, while the GDP deflator increased by 4
percent, by how much did real GDP change during the year?
2 percent
