Question

which of the following would represent an addition to a nation’s gdp? ms. jones purchases a share of stock in a technology start - up company an auto retailer purchases imported cars the government hires workers to install streetlights a business sells used watches a mother prepares a home cooked meal for her family if the nominal gdp for a given year is $500 billion and the real gdp for that year is $400 billion then which of the following must be true the gdp deflator is 150 the gdp deflator is 125 the country is experiencing deflation the country is producing more output than it was the previous year the unemployment rate will increase as the economy improves

Explanation:

Step1: Analyze first GDP question

GDP counts final goods/services produced domestically in a period. Stock purchases are financial transfers (no production), imports subtract from GDP, used goods were counted when new, home cooking is non-market activity. Government hiring workers for streetlights is a new domestic service.

Step2: Calculate GDP deflator for second question

Use formula: $\text{GDP Deflator} = \frac{\text{Nominal GDP}}{\text{Real GDP}} \times 100$
Expression: $\frac{500}{400} \times 100 = 125$
A deflator >100 means inflation, not deflation; we can't compare to prior year output, and unemployment falls as economy improves.

Answer:

1. The government hires workers to install streetlights
2. The GDP deflator is 125