Chapter 2
Chapter 2
Chapter 2
b) Explain four (4) examples of transactions that will not be included in this year’s
GDP. Underground activities, second-hand goods, non-market transactions
(eg sales of shares), intermediate goods
2. GDP will be equal to $101,536. This is based on the concept of equilibrium where all
expenditures on final goods and services are equal to the income earned to spend on
those goods & services which are in turn equal to the value amount of goods and
services produced
3. a)
2001 2000
Items Quantity Price ($) Expenditure ($) Price ($) Expenditure ($)
Pizza 10 pieces 10 100 9 90
Coca Cola 20 bottles 3 60 2 40
Salad 20 bowls 4 80 5 100
240 230
b) $240
c) $230
d) 2001: 240/230 x 100 = 104.35. 2000 = 100
4.
2003 2004
Numbers unemployed 7 9
a) Participation rate for 2003 - 65.5% and 2004 – 67.3%. Participation rate has
increased.
b) Unemployment rate in 2003 – 6.4% and 2004 – 7.8%. The unemployment rate
has increased.