1.If in some country personal consumption expenditures in a specific year are $50 billion,purchases of stocks and bonds are $30 billion, net exports are -$10 billion, governmentpurchases are $20 billion, sales of second-hand items are $8 billion, and gross investmentis $25 billion, what is the country's GDP for the year?)

2.Which contributes more to GDPthe production of an economy car or the production of aluxury car? Why?

3.Using the following national income accounting data, compute GDP by the expendituresapproach. All figures are in billions

Wages, salaries, and supplementary labour income $194.20

Canadian exports of goods and services 17.8

Capital consumption allowances (depreciation). 11.8

Government current purchases of goods andservices. 59.4

Net investment (net capital formation) 52.1

Canadian imports of goods and services 16.5

Personal consumption expenditures 219.1

4.Which of the following are included or excluded in deriving this year's GDP? Explain the answer in each case.

a) Interest received on a Rogers Communications corporate bond.

b) Canada Pension Plan payments received by a retired factory worker

.c) The unpaid services of a family member in painting the family home.

d) The Income of a dentist from the dental services provided.

e) The monthly allowance a college/university student receives from home.

f) The money received by Josh when he resells his nearly brand-new Honda automobileto Kim.

g) The publication and sale of a new college/university textbook.

h) An increase in leisure resulting from a two-hour decrease in the length of theworkweek, with no reduction in pay.

i) A $2 billion increase in business inventories.

j) The purchase of 100 shares of the Bank of Montreal stock.

5.Below are some data from the land of milk and honey.

Year Price ofMilk Quantity ofMilk(litres) Price ofHoney Quantity ofHoney(litres)

2013 $1 100 $2 50

2014 1 200 2 100

2015 2 200 4 100

a) Compute nominal GDP, real GDP, and the GDP deflator for each year, using 2013 as thebase year.

b) Compute the percentage change in nominal GDP, real GDP, and the GDP deflator in 2014and 2015 from the preceding year. For each year, identify the variable that does not change.Explain in words whytheanswer makes sense.

c) Did economic well-being rise more in 2014 or 2015? Explain