Quiz 8: The Keynesian Short-Run Policy Model: Demand-Side Policies

Business

a. According to World Bank report 2012, the consumption expenditure of Mexico as percentage of GDP is 76percent. b. According to World Bank report 2012, the consumption expenditure of Thailand as percentage of GDP is 66.93 percent. c. According to World Bank report 2012, the consumption expenditure of Poland as percentage of GDP is 80.27 perecent. d. The Private consumption expenditure of Nigeria is 52.26 percent of GDP according to (NBS, 2007). e. According to World Bank report 2012, the consumption expenditure of Kuwait as percentage of GDP is 37.38 percent.

GDP i.e. gross domestic product is the total sum of goods and services produced within the country in a year. GNP i.e. gross national product is total sum of goods and services produced by the citizens of the country irrespective of the borders of the country. a.There can be two different school of thoughts that can answer this question. An economist would believe that the reason for not counting the household work in GDP is that it is not possible to calculate the value of the work done at home because everybody has different potential and productivity. While some would believe that the reason behind this is the undervaluation of work done by females as they are consideredb.This approach makes ac.If one has to calculate the value of the job done at home, then one has to hire somebody to do the same work, and the price charged by the person would be the value of a job that females do at home.

Consumption expenditure category of production is largest for most countries. Consumption refers to the spending by households on goods and services. The expenditure by consumers on shampoo, food, television, refrigerator, doctors and lawyers etc. represent the consumption expenditure. Whatever production takes place in economy, part of it is purchased by consumers. According to the World Development Report, 2009 the United States has maximum consumption expenditure of $10,057 billion. The consumption expenditure contributes to 71 percent of the GDP in United States. The Belgium's consumption expenditure is 51 percent of the GDP, investment expenditure is 23 percent of the GDP and government expenditure is also 23 percent of the GDP. In other countries too major category is consumption. Thus, consumption expenditure category is largest for most countries.