1. Short Quiz
1. Which type of taxes should be favored by wealthier
incomes?
A. Progressive taxes B. Regressive taxes C. Gift taxes
D. Proportional taxes
E. Property taxes
2. Which part of our government is tasked with preventing
the free rider problem?
A. Homeland Security B. Antitrust law C. State governments
D. Internal Revenue Service
E. US Park Service
3. Which of the following would be counted as part of the
GDP calculation of a country?
A. Used clothing B. Stock purchases C. hair cuts
D. social security payments
E. interest on a student loan

2. Questions
1. Calculate the GDP of Mexico in 2009, where
exports were $223.6 billion, imports were $234.6
billion, consumers spent $969 billion, $296 billion
was invested in business, and government spent
$229 billion.
2. Is Mexico a net exporter or net importer?
3. If Costa Rica’s GDP is $48 billion, which country
has a larger economy?
4. How many students are in class today?
5. Do you think the world is getting richer or poorer?

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GDP
What economic activity did I leave out?
Transfer payments
Financial transactions
Used items
Black market
2 ways GDP might be misleading?

4. US GDP history by part

5. Why not just look at GDP?

6. Per capita statistics
• Latin for “per each head”
• IOW: Per person
X
• X per capta =
# of people
• On your BR:
Calculate cellphones per capita
Bank accounts per capita
Household vehicles per capita

9. Source: MSN

11. GDP per capita
• Adjust for different population
– Divide GDP by population
GDP $
# of people

14. 2009-2012
Top 24 GDP
richest countries

15. Mexico vs. Costa Rica
GDP: $1.483 trillion
($1483 billion)
Population:
111 million
GDP per capita:
$13,360
GDP: $48 billion
Population:
4.2 million
GDP per capita:
$11,480

16. China vs. Germany
GDP: $6 trillion
($6,000 billion)
Population:
1.3 billion
1,300 million
GDP per capita:
$4,600
GDP: $3.6 trillion
($3,600 billion)
Population:
81 million
.081 billion
GDP per capita:
$38,000

17. Show video clip
In the last 200 years, describe world GDP per
capita.
Do you think this will continue for another 200
years? Explain.

18. GDP consumption hunter
• http://www.reffonomics.com/TRB/chapter21/
HunterLessons/consumptionhunter3.swf
• http://www.reffonomics.com/TRB/chapter21/
HunterLessons/notincludedinGDP3.swf

19. Assignment
• Create an assignment for the regular students to do
#1 12 realistic scenarios for students to choose the
component. 3 for each part of GDP. For example:
1965 US creates Medicare (govt spending)
#2 2 GDP problems (C + I + G + X)
#3 Why is GDP per capita a better measure of wealth
than GDP?