Chapter1answer

Topics: Gross domestic product, Value added, National accounts Pages: 22 (3973 words) Published: January 12, 2015
NSS Exploring Economics 5

Chapter 1Measurement of economic performance (I) – GDP and GNP

Questions

P.2
Think it over
1.
Hong Kong people are hardworking and productive. How do we measure our total output?

2.
Our logistics industry is important to our economy. How do we measure its contribution to our economy?

P.3
Test yourself
1.1
Are the following items stocks or flows?
a. The number of Cokes in a refrigerator
b. Your savings deposit in a bank.
c. Output of toys per day
d. Birth rate of a country

P.5
Test yourself
1.2
Are the following resident producing units of Hong Kong?
a. A foreign domestic helper
b. An employee of the Bank of East Asia
c. Branches of the Bank of East Asia in Hong Kong
d. The Bank of East Asia (China) Limited (a subsidiary of the Bank of East Asia in the mainland of China)

P.5
cartoon
In two minutes, try to recite the definition of GDP:
GDP is the ____________ of _________ of all __________ of a country or territory in a specified period.

P.8
Test yourself
1.3
Determine whether the following items are final products or intermediate products. a. Cloth bought by a housewife for making clothing for her children b. Cloth bought by a domestic garment factory for producing clothing for sale c. Cloth exported to a foreign garment factory for producing clothing for sale d. A sewing machine bought by a domestic garment factory for producing clothing for sale

P.16
Discuss
1.1
How should the following government expenditures be treated in calculating GDP? a. Expenditure of government departments which are engaged in market activities b. Government investment expenditure

P.19
Test yourself
1.4
Are the following items included in the GDP calculated by the expenditure approach? Put a tick ‘’ to indicate to which expenditure component(s) they belong.

Is it included in the calculation of GDP?
C
I
G
X
M
a. Commission paid by a household for the purchase of a second-hand private car yes/no

b. A household’s expenditure on shares
yes/no

c. Market value of a T-shirt produced last year but which remained unsold this year yes/no

d. A household’s expenditure on a currently produced sewing machine yes/no

e. Compensation paid to a traffic accident victim
yes/no

f. Foreign expenditure on domestic exports of toys
yes/no

g. A household’s expenditure on an imported computer
yes/no

P.21
Discuss
1.2
Refer to Table 1.1. Rank the ratios of various expenditure components (C, I, G and NX) to GDP in 2008 in descending order. What can you find?

P.23
Test yourself
1.5
Should the following items be deducted from the revenue of a coffee shop to obtain its value-added?

Deducted
Not deducted
a. Shop rent paid to a
property developer

b. Wage payments

c. Electricity and water
charges

d. Cost of coffee beans
purchased

e. Profit of entrepreneurs

f. Depreciation of fixed
capital purchased

g. Expenditure on the
purchase of fixed capital

P.27
Test yourself
1.6
Suppose an actor from Taiwan was employed by Hong Kong Disneyland to stage a show for six months. Are Hong Kong Disneyland and the actor Hong Kong residents?

P.28
Test yourself
1.7
Are the following items included in GDP or/and GNP? Are they external factor income flows?

Included in
GDP?
Included in
GNP?
Is it external factor income flow?
If so, is it an inflow or outflow?
a. Dividends from US shares held
by Hong Kong residents

b. Salary of a Filipino maid working in Hong Kong for three years

c. Payment to a US consultant hired by the MTR Corporation Limited on a three-month contract

d. Expenditure on goods exported
by a resident producing unit

P.29
Test yourself
1.8
Refer to the table below. From 2004 to 2008, which one was larger, GDP or GNP? Must GNP be larger than GDP? Explain.

# Revised figures
Source:...
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