3.If the price of a hot dog is $2 and the price of a hamburger is $4, then 30 hot dogs contribute as much to GDP as _____ hamburgers.

a.5

b.15

c.30

d.60

4.In the year 2017, the economy produces 100 loaves of bread that sell for $2 each. In the year 2018, the economy produces 200 loaves of bread that sell for $3 each. Calculate nominal GDP, real GDP, and the GDP deflator for each year. (Use 2017 as the base year.) By what percentage does each of these three statistics rise from one year to the next?

5.What components of GDP (if any) would each of the following transactions affect? Explain.

a.Uncle Henry buys a new refrigerator from a domestic manufacturer.

b.Aunt Jane buys a new house from a local builder.

c.The Jackson family buys an old Victorian house from the Walker family.

d.You pay a hairdresser for a haircut.

e.Ford sells a Mustang from its inventory to the Martinez family.

f.Ford manufactures a Focus and sells it to Avis, the car rental company.

g.California hires workers to repave Highway 101.

h.The federal government sends your grandmother a Social Security check.

i.Your parents buy a bottle of French wine.

j.Honda expands its factory in Ohio.

1.

2.

3.

4.

5.

6.

7.

8.

9.

9.Consider an economy that produces only chocolate bars. In year 1, the quantity produced is 3 bars and the price is $4. In year 2, the quantity produced is 4 bars and the price is $5. In year 3, the quantity produced is 5 bars and the price is $6. Year 1 is the base year.

a.What is nominal GDP for each of these three years?

b.What is real GDP for each of these years?

c.What is the GDP deflator for each of these years?

d.What is the percentage growth rate of real GDP from year 2 to year 3?

e.What is the inflation rate as measured by the GDP deflator from year 2 to year 3?

f.In this one-good economy, how might you have answered parts (d) and (e) without first answering parts (b) and (c)?

10.One day, Barry the Barber, Inc., collects $400 for haircuts. Over this day, his equipment depreciates in value by $50. Of the remaining $350, Barry sends $30 to the government in sales taxes, takes home $220 in wages, and retains $100 in his business to add new equipment in the future. From the $220 that Barry takes home, he pays $70 in income taxes. Based on this information, compute Barry's contribution to the following measures of income.

a.gross domestic product

b.net national product

c.national income

d.personal income

e.disposable personal income