(a)
Classify the goods and services as final goods and services or intermediate goods and services.
(a)
Explanation of Solution
Hair cut purchased from the hair salon is a final services. The reason is, for the hire cutting, this is the final or ultimate service the consumer can available.
Final goods: These goods are not used as raw materials for the production of other commodities during the accounting year.
(b)
Classify the goods and services as final goods and services or intermediate goods and services.
(b)
Explanation of Solution
A new automobile is a final good and it can be go for ultimate consumption by the consumer or this can consumed and utilized directly by the consumers themselves.
Final goods: These goods are not used as raw materials for the production of other commodities during the accounting year.
(c)
Classify the goods and services as final goods and services or intermediate goods and services.
(c)
Explanation of Solution
Purchase of oil filter in a new automobile is an intermediate good. It is consumed along with the automobile and oil filter cannot use alone.
Intermediate goods: These goods may be used as raw materials for the production of other goods during the accounting year.
(d)
Classify the goods and services as final goods and services or intermediate goods and services.
(d)
Explanation of Solution
Crude oil is an intermediate goods, because it is considered as a raw material and it cannot used alone.
Intermediate goods: These goods may be used as raw materials for the production of other goods during the accounting year.
Want to see more full solutions like this?
Chapter 5 Solutions
MACROECONOMICS FOR TODAY
- Which of the following are final goods or services,and which are intermediate goods or services?a.A haircut purchased from a hair salon.b.A new automobilec.An oil filter purchased in a new automobiled.Crude oilarrow_forwardwhat is Value Added at Producer Price and Value Added at Purchaser Price. How are they calculatedarrow_forwardWhat is the difference between gross national product and net national product?arrow_forward
- What is the term for the total value of goods and services produced within a country's borders in a given year? A. Gross national product (GNP) B. Gross domestic product (GDP) C. Net exports D. Aggregate demandarrow_forwardWhat should be added to the net output to get the national income? a. Net factor income from abroad b. Net consumption c. Intermediate consumption d. Net incomearrow_forwardTo arrive at the National income using the value added method, what has to be added to the net output? a. investments from the private sector b. Imports c. government spending and taxes d. net foreign factor income from abroadarrow_forward
- 30 Gross Domestic products includes net income from abroad Select one: a. True b. Falsearrow_forwardPurchase of electricity by a family is: a. not counted in GDP b. counted as part of net exports c. counted as part of government purchases d. counted as part of private investment e. counted as part of consumptionarrow_forwardWhich of the following are included in GDP, and which are not? a. The cost of hospital stays b. The rise in life expectancy over time c. Child care provided by a licensed day care center d. Child care provided by a grandmother e. A used car sale f. A new car sale g. The greater variety of cheese available in supermarkets h. The iron that goes into the steel that goes into a refrigerator bought by a consumerarrow_forward
- A small economy produced the following final goods and services during a given month: 3 million pounds of food, 50,000 shirts, 20 houses, 50,000 hours of medical services, 1 automobile plant, and 2 tanks. Good or Service Quantity Market Price Value of Output (Per unit) Pounds of food 3 million pounds $1 Shirts 50,000 $21 Houses 20 $50,000 Medical services 50,000 hours $20 Automobile plant 1 $1,000,000 Tanks 2 $500,000 Based on your calculations, the total value of GDP in this economy is?arrow_forwardA farmer grows a bushel of wheat and sells it to a miller for $40.00. The miller turns the wheat into rice flour and then sells it to a baker for $70.00. The baker uses the flour to bake bread and sells the bread to a Musician for $150.00. The Musician brought home the bread and ate them with her family. 1.) What is the value-added by each person? 2.) What is the final value included in the gross domestic product? Please provide an explanation. Thank you!arrow_forwardI. The sale of a house from an existing homeowner to an incoming homeowner in a subdivision is included in the computation of GDP II. The purchase of stocks and bonds is not included in the computation of GDP III. Broker's commissions for the sale of financial instruments is included in the computation of GDP IV. The lawyer's fees to facilitate the transfer of title of an existing house from one homeowner to another is included in the computation of GDP O Only Statement Il is false O Only Statement I is false All Statements are false Only Statements III and IV are true O All Statements are truearrow_forward
Brief Principles of Macroeconomics (MindTap Cours...EconomicsISBN:9781337091985Author:N. Gregory MankiwPublisher:Cengage Learning
Essentials of Economics (MindTap Course List)EconomicsISBN:9781337091992Author:N. Gregory MankiwPublisher:Cengage Learning