1.The government purchases components of GDP do not include spending on transfer payments. Thinking about the definition of GDP, explain why transfer payments are excluded?

2.GDP does not include the value of used goods that are resold. Why would including such transactions make GDP a less informative measure of economic well-being?

3.Some economist argues for lengthening patent protection while some economist argues for shortening it. Why might patents increase productivity? Why might they decrease productivity?

4.The phenomenal growth rate of Japan since World War II has been referred to as the Japanese miracle. In your opinion, is it a miracle or is it can be explained?

5.An increase in the government's budget deficit forces the government to borrow more. Why doesn't an increase in the deficit increase the demand for loanable funds in the loanable funds market?

6.Utilizing the national income identities, if government purchases were to rise and if output, taxes and consumption were to remain unchanged, what would happen to national saving, investment and growth.