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1)  In year 1, the prices of goods X, Y, and Z are $2, $4, and $6 per unit, respectively

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1)  In year 1, the prices of goods X, Y, and Z are $2, $4, and $6 per unit, respectively. In year 2, the prices of good X, Y, and Z are $3, $4, and $7, respectively. In year 2, twice as many units of each good are produced as in year 1. In year 1, 20 units of X, 40 units of Y, and 60 units of Z are produced. If year 1 is the base year, what does Real GDP equal in year 2?

 

 

2) Which of the following should be included in the U.S. GDP for 2020? Explain why they should or should not be included.

a.   A federal courthouse built in Utah in 2020.

b.   A car made in Ohio in 2019 and purchased by a resident of Indiana in 2020.

c.   A bushel of apples grown by a Washington farmer and traded to his neighbor for four pounds of honey in 2020.

d.   A fighter jet produced in Texas in 2017 and sold to Canada in 2020.

e.   A car produced in Germany in 2020 and sold in Kansas in 2020.

f.    A house built in Dallas Texas in 2019 but not sold until 2020.