A company based in China manufactured semiconductors in 2020. A computer manufacturing company based in the US imported this semiconductor in 2021, built it into a personal computer, and exported the personal computer to Korea in the same year. A university student in Korea bought this personal computer in 2021. Mark each item of GDP whether increase (+), decrease (-), or no change (0) for the changes in each country's 2021 national income accounts due to the above transactions? (+ = increase, - =decrease, 0 = no change)

Korea China U.S.A

(Consumption, Net Export, GDP) (Net Export, GDP) (Net Export, GDP)

Q2. Answer following arguments regarding GDP by T (true) or F (false).

(1) The value of goods produced in 2019, held in inventory and sold in 2020, is included in 2020 GDP.

(2) The commission received by the real estate agent for the 2020 sale of an apartment built in 2001 is included in 2020 GDP.

(3) In 2020, when parents who were disappointed in schooling quit their jobs and teach their children at home, GDP in 2020 will decrease.

(4) The cost of repairing flood damage is included in GDP.

(5) The value of cars produced in the United States by Korean automakers in 2020 and sold in Korea is included in Korea's 2020 GDP.

Q3. A used car dealer purchased a used (pre-owned) car (new car price was $20,000 at the time of shipment) one year after it was manufactured. A dealer paid $13,000 at the beginning of January 2021. A dealer repaired it, and sold it to a customer in early May 2021 for $15,000. Theoretically, what is the size of the 2021 GDP growth in this process?

Q4. Answer following arguments regarding macro-economic data by T (true) or F (false).

(1) When more and more people drink wine recently than in the past and the price of wine rises, the CPI (Consumer Price Index) overestimates the price increase.

(2) When coffee prices rise compared to the past and more people will substitute tea, the CPI overestimates the price increase.

(3) Although GDP measures the value of goods and services produced in a country, it has limitations as an accurate measure of the welfare level of that country.

(4) In countries where there are few domestic products to replace imported products, the GDP deflator is inadequate as a measure of the cost of living for the general public.

Q5. Assume that the economic data of a country that produces only two goods, rice and clothes, are shown in the table below. Answer following questions.

	Rice	Clothes
Price ($)	Quantity	Price ($)	Quantity
2006 Base Yr	10	150	12	50
2007	12	200	15	100

(1) What is nominal GDP in Yr 2006?

(2) What is real GDP in Yr 2007?

(3) What is GDP deflator in Yr 2006?

(4) What is Laspeyres Price Index in Yr 2007?

(5) What is real economic growth rate?

Q6. Answer following arguments regarding GDP by T (true) or F (false).

(1) To calculate GDP, one can use the method of summing up the prices of all final products produced.

(2) If an automaker's car inventory increases, it is not included in the calculation of GDP.

(3) GDP can be calculated by adding up all the added values generated by each stage of production.

(4) The added value of furniture made by a furniture store is included in GDP, but furniture handmade by individuals for their own use is not included in the calculation of GDP.

(5) Rental income from a building in Seoul owned by a foreigner is included in the calculation of Korea's GDP.