Download principles of macroeconomics assignment 3 1. (10 points) In

principles of macroeconomics
assignment 3
1. (10 points) In complete sentences, define the measurement of production called GDP,
and list and briefly describe the four expenditure categories used to measure it.
a) Gross Domestic Product, or GDP, measures the monetary value of all final
production in an economy in one year. The expenditure categories used to
measure it are:
1) consumption expenditures (C) , which measures the value of spending on
domestic production by households,
2) investment spending (I), which measures the value of spending on domestically
produced capital and inventory by businesses,
3) government purchases (G), which measures the value of the government
purchases of domestic production, and
4) net export spending (Xn), which measures the net addition to spending on
domestic production due to international trade.
2. (10 points) Hari Seldon has just retired from his faculty position at the University of
Trantor. Still feeling healthy and fit, he plans on spending three months working on his
garden at home, and then looking for a part-time job to occupy his time. In complete
sentences, describe whether Hari is part of the ANC population, the labor force, and
whether he is unemployed.
a) Hari Seldon is over 16 years old, not institutionalized, and not in the military;
therefore, is considered capable of being employed and so is included in the
ANC (adult, noninstitutionalized, civilian) population. Hari is not currently seeking
work, so is not considered as “wanting to work”; therefore, is not part of the
civilian labor force. To be unemployed, a person must be part of the labor force;
therefore, Hari is not unemployed.
b) Hari Seldon is the central character in one of Isaac Asimov’s best works, the
Foundation trilogy, and is credited with creating the (future and fictional)
science of psychohistory, which he used to predict and guide the sociological,
political, and economic future of the human species. Published in 1951, it was
one of my favorites growing up, and I still read it again every couple of years or
so.