Us Economy and Gdp Essay
2. In 2-3 paragraphs explain GDP: what items are included & excluded and why intermediate goods and services are usually not included directly in GDP.
3. Rank, i.e. list, the following in order of increasing (from negative to positive) cross – price elasticity of demand with coffee. Explain your reasoning.
4. In 3-4 paragraphs, provide examples and discuss how the “Rules of the Game” impact the US economic growth and productivity. What current US economic Rules of the Game are impacting economic growth today?
5. In 2-3 paragraphs, discuss how markets coordinate the …show more content…
GDP, or gross domestic product, is the overall value of finished goods and services produced by a country. It is one of the main measurements used to test the health of a country.
GDP measures finished goods. Goods that are in inventory and ready for sale are considered finished goods. No partial goods or raw materials are included.
This can be difficult to understand at first. The easiest way to understand finished goods is that each step in the process adds value. The final step is the ultimate value of all of the intermediate products and services.
Rank, i.e. list, the following in order of increasing (from negative to positive) cross – price elasticity of demand with coffee. Explain your reasoning.
For this example, suppose that coffee has increased 15%. There are four products
Cream is a complimentary product. The increase in price of coffee will decrease the demand for cream. This is a negative Cross-price elasticity of demand.
Bleach- coffee has no relation with bleach. The coefficient is zero.
Cola –as the cost of coffee increases, consumers turn to cheaper alternatives to wake up. Cola is a similar alternative, but it has other things…