Subjectivity statement Essay Example | Topics and Well Written Essays - 500 words - 1

Subjectivity statement - Essay Example The basis of my opinion is that the food and beverage industry considers children and adolescents as key market force (Story & French, 2004). This assertion is supported by the current intensified and specialized food advertising efforts and policies that target adolescents, chiefly girls. Since I was a child, I have had the opportunity to be in the midst of girls and critically studied their attitude to advertisements, of which I have come to realize that adolescent girls are more easily influenced by food advertisements. It is for this reason, among others, that I am interested in unearthing the relations between food advertisement and adolescent girls’ nutritional status and eating behaviors. Besides the apparent global interest in this subject, I would wish to explore it further for its personal relations and effects on my life and my family’s. For instance, I have three lovely little kids, one daughter and two sons, whose age range from 5 to 11 years. Notably, all of them fall in the school-going age, their school-going age making food advertisement and teenage girls’ eating habit issues my concern. However, I appreciate that school-going children need a lot of energy and generally love food a lot due to their active lives. On a more personal level, as a kid, I was rather chubby and I really had a rough time growing up. Additionally, the fact that my family came from a foreign and we settled in a strange land made the situation worse for me as. As I was introduced and got accustomed to the American way of living and eating, characterized by fast food and junk food, I gained more weight. Hence, since my childhood, I have been concerned with health and well-being. More specifically, I am currently concerned about the physical, emotional, and psychological well-being of my family and my students. As a teacher, I must ensure that my students, who are youth, understand both the positive and negative implications of

Liquefied Natural Gas Lng Economics Essay

Liquefied Natural Gas Lng Economics Essay Liquefied Natural Gas forecasts are highly-structured and capital intensive in order to protect the investment return that projects developers conventionally covered all their future LNG. The past years have witnessed a dramatic development in LNG industry which is under metaphases from an infant towards a maturing industry with the ongoing process of slackening in the world market, LNG plays an increasingly important role in meeting the rapid gas demand worldwide by offering its merits of diversification and flexibility for securing gas supply of price signals cross isolated regions. According to BP 2010 So far, LNG accounts for 30.5% of world trade volume and the figure is expected to be growing. Over the past five years it has became acceptable industry practice for even contractually committed LNG with a specified destination to be diverted to another market with mutual agreement of both the seller and the buyer. The financial incentives to benefit from market in efficiency and regional supply-demand motivated market players to allow ad-hoc cargo diversions, sharing the profit resulting from the arbitraging between the respective parties. With a careful study of the process of arbitrage from school of thought: Prof. Dr. Hasret B. and others; I have been privileged to understand the nature of LNG and why is not neglected. This same study put up a questions: who are the arbitrageurs, what are the constraints and limitations they fall, and why arbitrage can fail to bring prices close to the fundamental value which implied by standard models. However, the focus of this article on the nature of LNG arbitrage and its theoretical growth in global markets reveals theoretical development within a simple model and also suggest directions for future research. According to Zhurravleva (2009), he pointed out why the LNG project is still in existence In 2007, the Equatorial Guinea LNG project sold its entire LNG output on a FOB (Freight On Board) basis to BG for 15 years, without incorporating a destination clause in the contract. Now what she actually meant here is that the business has enabled the buyer (BG) to divert the cargoes and act as aggregators (arbitrageur), effective and monetizing their delivery. Other significant sources of flexible cargoes are Qatar, Trinidad and Tobago, Algeria and Egypt. The classic destination and the availability of non-committed shipping capacity are not the only barrier towards the LNG arbitrage rather than other factors such as; technical and market restrictions, high transaction costs which hinder LNG diversions. The significance of these barriers varies overtime and differs from market to market; however it is important to understand the aforementioned theoretical importance and the extent to which they may constrain the development of the global LNG arbitrage market. Therefore with a clear observations of The Unique Features of the LNG Shipping Market: A Study of Ship-owners Structure and Fleet Distribution by Wang, S. et al 2011; a common assumption refers to the spending race in which high frequency traders employ LNG trading to execute orders as fast as possible in other to gain an edge in trading. This is because LNG arbitrage was viewed as natural conventional evolution that eventually would translate into more efficiency in the market place as the speed down to all investors in the markets. The past years of a close witness of how LNG industry put up a dramatic development still remain green in my mind till today. This because I was present creating inspirations with mine Late Timothy O. Anyanwu.; he gave breath to me and nurtured me towards the business in sub-region at Enugu, Nigeria. From a clear concept of it is being characterised with a high-structured and capital intensive one which is tied with a long-term contracts for years or more. He maximized a transparent and profitable annual return for Oando Nigeria Plc till present. 1.2 LITRATURE REVIEW With the general growth of LNG arbitrage research in business and financial project sectors, it would be glare to put a distinct relationship or differences between a considerable attention I recent years. In some research attempts to go beyond the project assumptions about how is being created for several years, they focused on point of context from one point of view which uses conversation analysis, such as LNG arbitrage, barrier and other interactional features. It inter-related some research which has focused only on the description of differences, other work has shown clearly how LNG projects reflect and reproduce financial differences. Accordingly, Zhuravleva (2009) pointed that the significant of barriers towards LNG varies overtime and differ from market to market. He pointed also that is important and to the extent to which they may constrain to the development of the global LNG arbitrage market. According to Mazighi (2003) considered that the globalization of LNG markets requires four conditions to be met; the natural, the economic, the technical and the institutional conditions. Much of the earlier work emphasized dominance. Neuhoff Hirchhausen (2008) suggested that assets-specific investments and uncertainty along with the LNG supply chain imply high transaction costs. He went further to point that long-term contracts can however help to minimize the transaction costs for two parties engaging in the commitment. According to an empirical analysis of Ruester (2006) it showed that in response to market deregulation, vertical integration was driven by upstream producers moving downstream with ownership of transportation capacities to exploit arbitraging possibilities and distribution and power companies moving upstream to ensure margins and security of supply. While some of the more popular work of this type, such as Jensen (2004), there are some potential similarities between the oil market and the natural gas market, however the way a global LNG market will set up is found to be different. The high cost of LNG transportation is one of the main reasons preventing the LNG market to be as flexible as oil market. He went further to point out that; long-term contracts in LNG have been the vehicle for sharing the large up-front investment risk characterize LNG projects, the short-term trading had been growing fast in recent years given the declining costs along the supply chain, the growing diversity of supply sources and loosening of the conventional rigid industry structure. Thus, the long term contract still remains a mainstay of international trade, and the growth of short-term trade volume and price arbitrage are limited accordingly. Although Zhuravleva (2009) distinction is clearly a useful one, it is also seems evident that the some useful approaches are by no means mutually exclusive. While is important on one hand, therefore, it is important to focus on the development of LNG arbitrage even when there is constrains. It also pointed out some conversation support on (P.2) clearly there is scope with great deal to expand in the area of this topic research Is based on embryonic stage of development Establish more insight on a clear formation of LNG arbitrage. Distinguish between LNG arbitrage with other trade activities relating to LNG markets. 1.3 METHODOLOGY This article is based on primary research. It involves three components: online questionnaires, interviews, mine experience in the business in Nigeria and feedback from the presentations of the research referring to Zhuravleva (2009) Oxford Institute of Energy Studies (OIES) The target group for the research was carefully selected to provide an informed range of insight. Thus, among the participant were natural gas and LNG traders, leading independent consultants, senior figures from several of the major energy companies and publishers of LNG journals and bulletins. The surveys sample size is relatively small due to the highly specialized nature of the topic, the dearth of trusted specialists in the LNG arbitrage trade and the difficulty in accessing experts. Nevertheless, the profiles and experience gathered by mine self and the participants were representative of the best in the sector. The data for the qualitative analysis was obtained with the help of the online questionnaires. When all the responses were collected, each participant were interviewed to assist in the qualitative analysis of the data. 2.1 Defining LNG Arbitrage Arbitrage is defined as the simultaneous purchase and sale of the same tangible goods in two different markets for advantageous purpose of different prices; but here such arbitrage required no capital and entails no risk Thus, referring to LNG arbitrage it means a physical cargo diversion from one market to another or re-experts of cargoes to spot gas market in markets in which gas prices are as much as high that covers the costs and profit remains. According to Zhuravleva (2009) defined LNG arbitrage as a physical cargo diversion from one market to another, which offers a higher price. He explained further that the diversion of the cargo can be regarded as arbitrage if the cargo was initially committed to the first market and to the initial buyer in a commercial contract. Two key drivers for arbitrage are commercial and operational. Commercial Driver: This is the ability to take advantage of price differential between the markets, which arise due to differing pricing structures, variations in the relative balances between supply and demand and market inefficiency. Operational Driver: This is the financial lose minimization in case of plant outages overfill storage tanks or force. However, advocates of unique world market for gas has to take into account that arbitrage are costly, and thus can lead only in some convergence of prices between different regional markets but not to the full price. According to Ikonnikova (2009), it makes the market flexible option and allows market players to benefits from arbitrage opportunity playing on price differential across regional market. 2.2 Models of LNG Arbitrage These are the three main models used in LNG trading; Models I: Seller Arbitrage: Here seller and buyer are used to indicate the seller of LNG cargo and the buyer of the LNG cargo. Initial buyer is the customer for whom the LNG has been initially contacted, while End Buyer is the purchaser of the diverted LNG. Model II: Initial Buyer Arbitrage: This model points out that the initial buyers market prices remain stable due to players profits from the arbitrage and replaces the LNG by spot cargoes later. Commonly used by Spanish Importers. Model III: Independent Trader Arbitrage: In this model another player called Independent Trader appears in the transaction. He buys the cargo from the initial buyer (Seldom from LNG Seller) and gets the right to divert the cargo to another customer offering a higher price. E.g., Garpron and Gas De France 2004. 2.3 Barriers to the Growth of LNG Arbitrage in Global Market After a qualitative analysis from the questionnaires of this article, the growth of the LNG arbitrage market implies an increase in the number of arbitrage transactions annually and the increase in the volumes that are being diverted one market to another. They are more than 12 barriers towards the growth of LNG arbitrage in global market but few will be mentioned here. They are as follows; The Price Differential Between Markets is Not Great Enough: Price spread must be great enough to cover the transaction costs and be a sufficient incentive for the aggregator, who often has to share the profit with another party. Without a price spread that allows the trader to profit, no arbitrage transaction will take place. Small Number of Players in the LNG Market: If two buyers are present for transaction in market then an arbitrage deal should be potentially possible. But they are rarely scarce for transaction. Lack of Price Transparency: Lack of price transparency complicates arbitrage trade and demand quickness of wit and good connections between the traders. In relations to countries involved in LNG trade, the US and UK gas market are the most transparent and liquid in the world while in continental European gas market where LNG is important Spain, France and Belgium. 3.1 CONCLUSION AND RECOMMENDATIONS With clear evidence on todays LNG world, it has been argued that it will drive the world markets for natural gas from region to unique world price but with a qualitative observation, the growing role of LNG arbitrage opportunities between countries differ from each other. And at the same time, the price gap between countries also differs because of its landing cost (transportation cost). We suggest a positive recommendation which could guide the global world at large which is UNIFORMITY in terms of LNG arbitrage operation. More research need to be done to enable expand this article aforementioned toward; its embryonic growth development, clear formation of LNG arbitrage and trade activities relating to LNG markets. REFERENCES Billingsley, R. (2005), Understanding Arbitrage: An Intuitive Approach to Financial Analysis. Wharton School Publishing, US BP Statistical Review, 2010. Chabrelie, M. (2003) A new trading model for the fast-changing LNG industry, first Asia Gas Buyers Summit. Clarkson research services (2010) Report of LNG Trade and Transport 2010. Facts Global Energy (2008), East West LNG Pricing Comparison: New Trends. New Frontiers, And Future Price Markets, Presented at Gastech, March 12th 2008, Bangkok, Thailand. Ikonnikova S., 2009, Strategic model of LNG arbitrage: analysis of LNG trade in Atlantic Basin, in 32nd International Association for Energy Economics Conference Proceedings. Institute of Energy Economics, Japan (2008), Natural Gas and LNG Supply/Demand Trends in Asia Pacific and Atlantic Markets. Tokyo, Japan. Jensen, J.T. (2004), The Development of a Global LNG Market. Oxford: Alden Press. Neuhoff, K., von Hirchhausen, C., (2005) Long-term vs. Short-term Contracts: A European Perspective on Natural Gas. Ruster, S., and Neumann, A., (2006) Corporate Strategies along the LNG Value Added Chain An Empirical Analysis of the Determinants of Vertical Integration. Wang, s., Notteboom, Theo E. (2011). The Unique Features of The LNG Shipping Market: A study Of ship-owners Structure And Fleet Distribution. Paper presented at IAME 2011, Santiago de Chile, 25-28 October 2011.World Bank Commodity Price Data, March, 2012. Zhuravleva. P. The Nature of LNG Arbitrage, and an Analysis of the Main Barriers for the Growth of the Global LNG Arbitrage Market, Oxford Institute for Energy Studies, NG 31, June 2009. TABLE OF CONTENTS Cover Page i Abstract ii Key words ii I.1: INTRODUCTION 1 : LITERATURE REVIEW 4 : METHODOLOGY 5 2.1: DEFINING LNG ARBITRAGE 6 Commercial Driver 7 Operational Driver 7 2.2 Models of LNG Arbitrage 8 2.2.1 Model I: Seller Arbitrage 8 2.2.2 Model II: Intial Buyer Arbitrageur 8 2.2.3 Model III: Independent Trader Arbitrage 9 2.3 Barriers to the Growth of LNG Arbitrage Global Market 9 3.1 CONCLUSION AND RECOMMENDATION 9

nucor case :: essays research papers

Nucor Corporation is constantly faced with obstacles and competition to overcome. This steel-making company whose name was formally adopted in 1972, has since been on a journey to join the ranks of the worlds leading steel companies. Although this is a highly profitable industry with a U.S. market of $94.9 billion, it is highly competitive and presents many bariers to entry. Three elements of competition in this particular industry include, 1.) Technology 2) Changes in cost and efficiencies and 3) globalization   Ã‚  Ã‚  Ã‚  Ã‚  Advances in technology can dramatically alter an industry’s landscape, making it possible to produce products at lower costs and opening up whole new industry frontiers. The management at Nucor believed they could use new technology to their advantage and make bolts as cheaply as foreign producers. The traditional integrated steel mills were outdated and inefficient compared to new electric minimills. Nucor embraced this new technology to produce steel. They became known for constructing state-of-the-art facilities at the lowest possible costs and for investing aggressively in plant modernization and efficiency improvements. New technology enabled minimills to triple their output in the 1990's. The new technology of twin shell electric arc furnaces helped minimills increase production, lower costs, and take additional market shares. Nucor’s use of advanced, efficient technologies enabled it to stay afloat when other companies could not. This use of t echnology also enables Nucor to lower many of the costs of maintaining environmental standards. With technological improvements to the plants and the production process, steel companies can better compete with each other. Because there is no real differentiation between products in the steel industry, companies will have to rely on technological innovation to profit in this industry.   Ã‚  Ã‚  Ã‚  Ã‚  As stated above, there is no real differentiation in products in this industry. Therefore steel companies have to be able to produce high quality products at low cost to compete. By improving production efficiencies and cost management, they will be a more profitable company. Nucor constantly spent money researching new ways to improve the production processes and keep up with the emerging markets. Nucor was known for constructing state-of-the-art facilities at the lowest cost and investing in plant modernizing and efficiency. At the Darlington plant the manger there developed a system where less time and less capital investment were required. This helped keep the fuel usage down and this was the only mill in the United States that was doing this.

Measuring a Nation’s Income

Chapter 23 Measuring a Nation's Income TRUE/FALSE 1. In years of economic contraction, firms throughout the economy increase their production of goods and services, employment rises, and jobs are easy to find. ANS:FDIF:1REF:23-0 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:Economic expansionMSC:Definitional 2. Macroeconomic statistics include GDP, the inflation rate, the unemployment rate, retail sales, and the trade deficit. ANS:TDIF:1REF:23-0 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:MacroeconomicsMSC:Definitional 3.Macroeconomic statistics tell us about a particular household, firm, or market. ANS:FDIF:1REF:23-0 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:MacroeconomicsMSC:Definitional 4. Macroeconomics is the study of the economy as a whole. ANS:TDIF:1REF:23-0 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:MacroeconomicsMSC:Definitional 5. The goal of macroeconomics is to explain the economic changes that affect many households, firms, and markets simultaneously. ANS:TDIF:1REF:23-0 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:MacroeconomicsMSC:Definitional . Microeconomics and macroeconomics are closely linked. ANS:TDIF:1REF:23-0 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:Microeconomics | MacroeconomicsMSC:Definitional 7. The basic tools of supply and demand are as central to macroeconomic analysis as they are to microeconomic analysis. ANS:TDIF:1REF:23-0 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:Demand | SupplyMSC:Definitional 8. GDP is the most closely watched economic statistic because it is thought to be the best single measure of a society’s economic well-being. ANS:TDIF:1REF:23-0NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Definitional 9. GDP can measure either the total income of everyone in the economy or the total e xpenditure on the economy’s output of goods and services, but GDP cannot measure both at the same time. ANS:FDIF:2REF:23-1 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Interpretive 10. For an economy as a whole, income must exceed expenditure. ANS:FDIF:1REF:23-1 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:Income | ExpenditureMSC:Definitional 11.An economy’s income is the same as its expenditure because every transaction has a buyer and a seller. ANS:TDIF:1REF:23-1 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:Income | ExpenditureMSC:Definitional 12. GDP is the market value of all final goods and services produced by a country’s citizens in a given period of time. ANS:FDIF:1REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Definitional 13. GDP adds together many different kinds of products into a single measure of the value of economic act ivity by using market prices. ANS:TDIF:1REF:23-2NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Definitional 14. U. S. GDP includes the market value of rental housing, but not the market value of owner-occupied housing. ANS:FDIF:2REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Interpretive 15. U. S. GDP excludes the production of most illegal goods. ANS:TDIF:2REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Interpretive 16. U. S. GDP includes estimates of the value of items that are produced and consumed at home, such as housework and car maintenance. ANS:FDIF:2REF:23-2NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Applicative 17. GDP includes only the value of final goods because the value of intermediate goods is already included in the prices of the final goods. ANS:TDIF:1REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of ec onomics TOP:GDP | Intermediate goodsMSC:Definitional 18. Additions to inventory subtract from GDP, and when the goods in inventory are later used or sold, the reductions in inventory add to GDP. ANS:FDIF:1REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDP | InventoryMSC:Definitional 9. While GDP includes tangible goods such as books and bug spray, it excludes intangible services such as the services provided by teachers and exterminators. ANS:FDIF:2REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Applicative 20. At a rummage sale, you buy two old books and an old rocking chair; your spending on these items is not included in current GDP. ANS:TDIF:2REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Applicative 21. When an American doctor opens a practice in Bermuda, his production there is part of U.S. GDP. ANS:FDIF:2REF:23-2 NAT:AnalyticLOC:The study of economics and definit ions of economics TOP:GDPMSC:Applicative 22. If the U. S. government reports that GDP in the third quarter was $12 trillion at an annual rate, then the amount of income and expenditure during quarter three was $3 trillion. ANS:TDIF:2REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Applicative 23. The government computes measures of income other than GDP because these other measures usually tell different stories about overall economic conditions.ANS:FDIF:2REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDP | IncomeMSC:Interpretive 24. Expenditures by households on education are included in the consumption component of GDP. ANS:TDIF:2REF:23-3 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:ConsumptionMSC:Interpretive 25. Most goods whose purchases are included in the investment component of GDP are used to produce other goods. ANS:TDIF:2REF:23-3 NAT:AnalyticLOC:The study of economics and d efinitions of economics TOP:InvestmentMSC:Interpretive 26.New home construction is included in the consumption component of GDP. ANS:FDIF:2REF:23-3 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:InvestmentMSC:Interpretive 27. Changes in inventory are included in the investment component of GDP. ANS:TDIF:2REF:23-3 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:InvestmentMSC:Interpretive 28. The investment component of GDP refers to financial investment in stocks and bonds. ANS:FDIF:2REF:23-3 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:InvestmentMSC:Interpretive 29.The government purchases component of GDP includes salaries paid to soldiers but not Social Security benefits paid to the elderly. ANS:TDIF:2REF:23-3 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:Government purchasesMSC:Interpretive 30. If the value of an economy’s imports exceeds the value of that economy’s exports, then net exports is a negative number. ANS:TDIF:2REF:23-3 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:Net exportsMSC:Interpretive 31. If someone in the United States buys a surfboard produced in Australia, then that purchase is included in both the consumption component of U.S. GDP and the net exports component of U. S. GDP. ANS:TDIF:2REF:23-3 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:Consumption | Net exportsMSC:Applicative 32. If consumption is $4000, exports are $300, government purchases are $1000, imports are $400, and investment is $800, then GDP is $5700. ANS:TDIF:2REF:23-3 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Applicative 33. If exports are $500, GDP is $8000, government purchases are $1200, imports are $700, and investment is $800, then consumption is $6200. ANS:TDIF:2REF:23-3NAT:AnalyticLOC:The study of economics and definitions of economics TOP:ConsumptionMSC:Appli cative 34. If consumption is $1800, GDP is $4300, government purchases are $1000, imports are $700, and investment is $1200, then exports are $300. ANS:FDIF:2REF:23-3 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:ExportsMSC:Applicative 35. U. S. GDP was almost $14 billion in 2007. ANS:FDIF:1REF:23-3 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Definitional 36. In 2007, government purchases was the largest component of U. S. GDP. ANS:FDIF:2REF:23-3NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Interpretive 37. If total spending rises from one year to the next, then the economy must be producing a larger output of goods and services. ANS:FDIF:2REF:23-4 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Interpretive 38. An increase in nominal U. S. GDP necessarily implies that the United States is producing a larger output of goods and services. ANS:FDIF:2REF:23-4 NAT :AnalyticLOC:The study of economics and definitions of economics TOP:Nominal GDPMSC:Interpretive 39.Nominal GDP uses constant base-year prices to place a value on the economy’s production of goods and services, while real GDP uses current prices to place a value on the economy’s production of goods and services. ANS:FDIF:1REF:23-4 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:Nominal GDP | Real GDPMSC:Definitional 40. Real GDP evaluates current production using prices that are fixed at past levels and therefore shows how the economy’s overall production of goods and services changes over time. ANS:TDIF:1REF:23-4 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:Real GDPMSC:Definitional 1. The term real GDP refers to a country’s actual GDP as opposed to its estimated GDP. ANS:FDIF:2REF:23-4 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:Real GDPMSC:Interpretive 42. Changes in real GDP reflect only changes in the amounts being produced. ANS:TDIF:1REF:23-4 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:Real GDPMSC:Definitional 43. Real GDP is a better gauge of economic well-being than is nominal GDP. ANS:TDIF:1REF:23-4 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:Nominal GDP | Real GDPMSC:Definitional 44.Changes in the GDP deflator reflect only changes in the prices of goods and services. ANS:TDIF:2REF:23-4 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDP deflatorMSC:Interpretive 45. If nominal GDP is $10,000 and real GDP is $8,000, then the GDP deflator is 125. ANS:TDIF:2REF:23-4 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDP deflatorMSC:Applicative 46. If nominal GDP is $12,000 and the GDP deflator is 80, then real GDP is $15,000. ANS:TDIF:2REF:23-4 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:Real GDPMSC:Applicative 7. Economist s use the term inflation to describe a situation in which the economy’s overall production level is rising. ANS:FDIF:1REF:23-4 NAT:AnalyticLOC:Unemployment and inflationTOP:Inflation MSC:Definitional 48. If the GDP deflator in 2006 was 160 and the GDP deflator in 2007 was 180, then the inflation rate in 2007 was 12. 5%. ANS:TDIF:2REF:23-4 NAT:AnalyticLOC:Unemployment and inflationTOP:Inflation rate MSC:Applicative 49. If the GDP deflator in 2004 was 150 and the GDP deflator in 2005 was 120, then the inflation rate in 2005 was 25%. ANS:FDIF:2REF:23-4NAT:AnalyticLOC:Unemployment and inflationTOP:Inflation rate MSC:Applicative 50. The GDP deflator can be used to take inflation out of nominal GDP. ANS:TDIF:1REF:23-4 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDP deflatorMSC:Definitional 51. In 2004, the level of U. S. real GDP was close to four times its 1965 level. ANS:TDIF:1REF:23-4 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:Real GDPMSC:Definitional 52. The output of goods and services produced in the United States has grown on average 3. 2 percent per year. ANS:TDIF:1REF:23-4NAT:AnalyticLOC:Productivity and growthTOP:Growth MSC:Definitional 53. Periods during which real GDP rises are called recessions. ANS:FDIF:1REF:23-4 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:RecessionsMSC:Definitional 54. Recessions are associated with lower incomes, rising unemployment, and falling profits. ANS:TDIF:1REF:23-4 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:RecessionsMSC:Definitional 55. If real GDP is higher in one country than in another, then we can be sure that the standard of living is higher in the country with the higher real GDP. ANS:FDIF:2REF:23-5NAT:AnalyticLOC:The study of economics and definitions of economics TOP:Real GDP | Standard of livingMSC:Interpretive 56. Real GDP per person tells us the income and expenditure of the average person in th e economy. ANS:TDIF:1REF:23-5 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:Real GDP per personMSC:Definitional 57. GDP does not directly measure those things that make life worthwhile, but it does measure our ability to obtain many of the inputs into a worthwhile life. ANS:TDIF:1REF:23-5 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Definitional 58.GDP does not make adjustments for leisure time, environmental quality, or volunteer work. ANS:TDIF:2REF:23-5 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Interpretive 59. Other things equal, in countries with higher levels of real GDP per person, life expectancy and literacy rates are higher than in countries with lower levels of real GDP per person. ANS:TDIF:2REF:23-5 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Interpretive SHORT ANSWER 1. GDP is defined as the market value of all final goods and services produ ced within a country in a given period of time.In spite of this definition, some production is left out of GDP. Explain why some final goods and services are not included. ANS: GDP excludes some products because they are so difficult to measure. These products include services performed by individuals for themselves and their families, and most goods that are produced and consumed at home and, therefore, never enter the marketplace. In addition, illegal products are not included in GDP even if they can be measured because, by society's definition, they are bads, not goods.DIF:2REF:23-2NAT:Analytic LOC:The study of economics and definitions of economicsTOP:GDP MSC:Interpretive 2. Explain why it is the case that the value of intermediate goods produced and sold during the year is not included directly as part of GDP, but the value of intermediate goods produced and not sold is included directly as part of GDP. ANS: Intermediate goods produced and sold during the year are not included separately as part of GDP because the value of those goods is included in the value of the final goods produced from them.If the intermediate good is produced but not sold during the year, its value is included as inventory investment for the year in which it was produced. If inventory investment was not included as part of GDP, true production would be underestimated for the year the intermediate good went into inventory, and overestimated for the year the intermediate good is used or sold. DIF:2REF:23-2NAT:Analytic LOC:The study of economics and definitions of economicsTOP:GDP | Intermediate goods MSC:Interpretive 3. Since it is counted as investment, why doesn't the purchase of earthmoving equipment from China by a U. S. orporation increase U. S. GDP? ANS: The purchase of foreign equipment is counted as investment, but GDP measures only the value of production within the geographic borders of the United States. In order to avoid including the value of the imported equipment, impo rts are subtracted from GDP. Hence, the value of the equipment in investment is canceled by subtracting its value as an import. DIF:2REF:23-3NAT:Analytic LOC:The study of economics and definitions of economicsTOP:GDP | Investment | Imports MSC:Applicative 4. Identify the immediate effect of each of the following events on U. S. GDP and its components. a. |James receives a Social Security check. | |b. |John buys an Italian sports car. | |c. |Henry buys domestically produced tools for his construction company. | ANS: |a. |Since this is a transfer payment, there is no change to GDP or to any of its components. | |b. |Consumption and imports will rise and cancel each other out so that there is no change in U. S. GDP. | |c. |This increases the investment component of GDP and so increases GDP. | DIF:2REF:23-3NAT:Analytic LOC:The study of economics and definitions of economics TOP:GDP | Transfer payments | Net exports | InvestmentMSC:Applicative . Between 1929 and 1933, NNP measured in cur rent prices fell from $96 billion to $48 billion. Over the same period, the relevant price index fell from 100 to 75. |a. |What was the percentage decline in nominal NNP from 1929 to1933? | |b. |What was the percentage decline in real NNP from 1929 to 1933? Show your work. | ANS: |a. |NNP measured in current prices is nominal NNP. Nominal NNP fell from $96 billion to $48 billion, a decline of 50 percent. | |b. |Real NNP is nominal NNP divided by the price index and multiplied by 100. Real NNP in 1929 was ($96 b/100) [pic] 100 = $96 | | |b.Real NNP in 1933 was ($48 b/75) [pic] 100 = $64 b. Real NNP fell from $96 billion to $64 billion, a decline of 33 | | |percent. | DIF:2REF:23-4NAT:Analytic LOC:The study of economics and definitions of economicsTOP:Nominal NNP | Real NNP MSC:Applicative 6. You find that your paycheck for the year is higher this year than last. Does that mean that your real income has increased? Explain carefully. ANS: Real income is nominal income adjusted for gene ral increase in prices. If my paycheck is higher this year than last, my nominal income has increased.Whether my real income has increased or not depends on what has happened since last year to the level of prices of things I buy with my income. If the percentage increase in prices is less than the percentage increase in my nominal income, then my real income has increased. Otherwise, my real income has not increased. DIF:2REF:23-4NAT:Analytic LOC:The study of economics and definitions of economics TOP:Nominal income | Real incomeMSC:Interpretive 7. U. S. real GDP is substantially higher today than it was 60 years ago. What does this tell us, and what does it not tell us, about the well-being of U.S. residents? ANS: Since this is in real terms, it tells us that the U. S. is able to make a lot more stuff than in the past. Some of the increase in real GDP is probably due to an increase in population, so we could say more if we knew what had happened to real GDP per person. Supposing t hat there was also an increase in real GDP per person, we can say that the standard of living has risen. Material things are an important part of well-being. Having sufficient amounts of things such as food, shelter, and clothing are fundamental to well-being.Other things such as security, a safe environment, access to safe water, access to medical care, justice, and freedom also matter. However, many of these things are more easily obtained by being able to produce more using fewer resources. Countries with higher real GDP per person tend to have longer life spans, less discrimination towards women, less child labor, and a higher rate of literacy. DIF:2REF:23-5NAT:Analytic LOC:The study of economics and definitions of economics TOP:Real GDP | Economic welfareMSC:Interpretive Sec00 – Measuring a Nation's Income MULTIPLE CHOICE 1.Statistics that are of particular interest to macroeconomists |a. |are largely ignored by the media. | |b. |are widely reported by the media. | |c. | include the equilibrium prices of individual goods and services. | |d. |tell us about a particular household, firm, or market. | ANS:BDIF:2REF:23-0 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:MacroeconomicsMSC:Interpretive 2. Macroeconomists study |a. |the decisions of households and firms. | |b. |the interaction between households and firms. | |c. |economy-wide phenomena. | |d. |regulations on firms and unions. | ANS:CDIF:1REF:23-0NAT:AnalyticLOC:The study of economics and definitions of economics TOP:MacroeconomicsMSC:Definitional 3. Which of the following newspaper headlines is more closely related to what microeconomists study than to what macroeconomists study? |a. |Unemployment rate rises from 5 percent to 5. 5 percent. | |b. |Real GDP grows by 3. 1 percent in the third quarter. | |c. |Retail sales at stores show large gains. | |d. |The price of oranges rises after an early frost. | ANS:DDIF:2REF:23-0 NAT:AnalyticLOC:The study of economics and defin itions of economics TOP:Microeconomics | MacroeconomicsMSC:Interpretive 4.Which of the following questions is more likely to be studied by a microeconomist than a macroeconomist? |a. |Why do prices in general rise by more in some countries than in others? | |b. |Why do wages differ across industries? | |c. |Why do production and income increase in some periods and not in others? | |d. |How rapidly is GDP currently increasing? | ANS:BDIF:2REF:23-0 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:Microeconomics | MacroeconomicsMSC:Interpretive 5. Which of the following topics are more likely to be studied by a macroeconomist than by a microeconomist? |a. the effect of taxes on the prices of airline tickets, the profitability of automobile-manufacturing firms, and | | |employment trends in the food-service industry | |b. |the price of beef, wage differences between genders, and antitrust laws | |c. |how consumers maximize utility, and how prices are established i n markets for agricultural products | |d. |the percentage of the labor force that is out of work, and differences in average income from country to country |ANS:DDIF:2REF:23-0 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:Microeconomics | MacroeconomicsMSC:Interpretive 6. We would expect a macroeconomist, as opposed to a microeconomist, to be particularly interested in |a. |explaining how economic changes affect prices of particular goods. | |b. |devising policies to deal with market failures such as externalities and market power. | |c. |devising policies to promote low inflation. | |d. |identifying those markets that are competitive and those that are not competitive. | ANS:CDIF:2REF:23-0NAT:AnalyticLOC:The study of economics and definitions of economics TOP:Microeconomics | MacroeconomicsMSC:Interpretive 7. Which of the following is not a question that macroeconomists address? |a. |Why is average income high in some countries while it is low in others? | |b. |Why does the price of oil rise when war erupts in the Middle East? | |c. |Why do production and employment expand in some years and contract in others? | |d. |Why do prices rise rapidly in some periods of time while they are more stable in other periods? | ANS:BDIF:2REF:23-0NAT:AnalyticLOC:The study of economics and definitions of economics TOP:MacroeconomicsMSC:Interpretive 8. The basic tools of supply and demand are |a. |useful only in the analysis of economic behavior in individual markets. | |b. |useful in analyzing the overall economy, but not in analyzing individual markets. | |c. |central to microeconomic analysis, but seldom used in macroeconomic analysis. | |d. |central to macroeconomic analysis as well as to microeconomic analysis. | ANS:DDIF:1REF:23-0 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:Demand | SupplyMSC:Definitional . Which of the following statistic is usually regarded as the best single measure of a society’s economic w ell-being? |a. |the unemployment rate | |b. |the inflation rate | |c. |gross domestic product | |d. |the trade deficit | ANS:CDIF:1REF:23-0 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:DefinitionalSec01 – Measuring a Nation's Income – The Economy's Income and Expenditure MULTIPLE CHOICE 1. Which of the following statements about GDP is correct? |a. |GDP measures two things at once: the total income of everyone in the economy and the unemployment rate of the economy’s | | |labor force. | |b. |Money continuously flows from households to government and then back to households, and GDP measures this flow of money. | |c. |GDP is to a nation’s economy as household income is to a household. | |d. |All of the above are correct. | ANS:CDIF:2REF:23-1NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Interpretive 2. Gross domestic product measures two things at once: |a. |the total spending of everyone in the economy and the total saving of everyone in the economy. | |b. |the total income of everyone in the economy and the total expenditure on the economy's output of goods and services. | |c. |the value of the economy's output of goods and services for domestic citizens and the value of the economy's output of | | |goods and services for the rest of the world. | |d. the total income of households in the economy and the total profit of firms in the economy. | ANS:BDIF:1REF:23-1 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Definitional 3. For an economy as a whole, |a. |wages must equal profit. | |b. |consumption must equal saving. | |c. |income must equal expenditure. | |d. |the number of buyers must equal the number of sellers. | ANS:CDIF:2REF:23-1 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:Income | ExpenditureMSC:Interpretive 4. For an economy as a whole, income must equal expenditure because |a. the number of firms is equal to the number of households in an economy. | |b. |international law requires that income equal expenditure. | |c. |every dollar of spending by some buyer is a dollar of income for some seller. | |d. |every dollar of saving by some consumer is a dollar of spending by some other consumer. | ANS:CDIF:2REF:23-1 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:Income | ExpenditureMSC:Interpretive 5. If an economy’s GDP rises, then it must be the case that the economy’s |a. |income rises and saving falls. | |b. |income and saving both rise. |c. |income rises and expenditure falls. | |d. |income and expenditure both rise. | ANS:DDIF:2REF:23-1 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:Income | ExpenditureMSC:Interpretive 6. If an economy’s GDP falls, then it must be the case that the economy’s |a. |income falls and saving rises. | |b. |income and saving both fall. | |c. |income falls and expenditure rises . | |d. |income and expenditure both fall. | ANS:DDIF:2REF:23-1 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:Income | ExpenditureMSC:Interpretive . Because every transaction has a buyer and a seller, |a. |GDP is more closely associated with an economy’s income than it is with an economy’s expenditure. | |b. |every transaction contributes equally to an economy’s income and to its expenditure. | |c. |the number of firms must be equal to the number of households in a simple circular-flow diagram. | |d. |firms’ profits are necessarily zero in a simple circular-flow diagram. | ANS:BDIF:2REF:23-1 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:Income | ExpenditureMSC:Interpretive 8.Which of the following statements about GDP is correct? |a. |GDP measures two things at once: the total income of everyone in the economy and the total expenditure on the economy’s | | |output of goods and services. | |b. |Mon ey continuously flows from households to firms and then back to households, and GDP measures this flow of money. | |c. |GDP is generally regarded as the best single measure of a society’s economic well-being. | |d. |All of the above are correct. | ANS:DDIF:2REF:23-1 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Interpretive 9.In a simple circular-flow diagram, total income and total expenditure are |a. |never equal because total income always exceeds total expenditure. | |b. |seldom equal because of the ongoing changes in an economy’s unemployment rate. | |c. |equal only when one dollar is spent on goods for every dollar that is spent on services. | |d. |always equal because every transaction has a buyer and a seller. | ANS:DDIF:2REF:23-1 NAT:AnalyticLOC:Understanding and applying economic models TOP:Circular-flow diagramMSC:Interpretive 10. In a simple circular-flow diagram, |a. |households spend all of their income. |b. |all goods and services are bought by households. | |c. |expenditures flow through the markets for goods and services, while income flows through the markets for the factors of | | |production. | |d. |All of the above are correct. | ANS:DDIF:2REF:23-1 NAT:AnalyticLOC:Understanding and applying economic models TOP:Circular-flow diagramMSC:Interpretive 11. In a simple circular-flow diagram, firms use the money they get from a sale to |a. |pay wages to workers. | |b. |pay rent to landlords. | |c. |pay profit to the firms’ owners. | |d. |All of the above are correct. | ANS:DDIF:1REF:23-1NAT:AnalyticLOC:Understanding and applying economic models TOP:Circular-flow diagramMSC:Definitional 12. In the actual economy, households |a. |spend all of their income. | |b. |divide their income among spending, taxes, and saving. | |c. |buy all goods and services produced in the economy. | |d. |Both (a) and (c) are correct. | ANS:BDIF:2REF:23-1 NAT:AnalyticLOC:Understanding and applying economic models TOP:C ircular-flow diagramMSC:Interpretive 13. In the actual economy, goods and services are purchased by |a. |households, but not firms or the government. | |b. |households and firms, but not the government. |c. |households and the government, but not firms. | |d. |households, firms, and the government. | ANS:DDIF:2REF:23-1 NAT:AnalyticLOC:Understanding and applying economic models TOP:Circular-flow diagramMSC:Interpretive Sec02 – Measuring a Nation's Income – The Measurement of Gross Domestic Product MULTIPLE CHOICE 1. GDP is defined as |a. |the market value of all goods and services produced within a country in a given period of time. | |b. |the market value of all goods and services produced by the citizens of a country, regardless of where they are living, | | |in a given period of time. | |c. the market value of all final goods and services produced within a country in a given period of time. | |d. |the market value of all final goods and services produced by the citiz ens of a country, regardless of where they are | | |living, in a given period of time. | ANS:CDIF:1REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Definitional 2. Gross domestic product is defined as |a. |the quantity of all final goods and services demanded within a country in a given period of time. | |b. |the quantity of all final goods and services supplied within a country in a given period of time. |c. |the market value of all final goods and services produced within a country in a given period of time. | |d. |Both (a) and (b) are correct. | ANS:CDIF:1REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Definitional 3. To compute GDP, we |a. |add up the wages paid to all workers. | |b. |add up the costs of producing all final goods and services. | |c. |add up the market values of all final goods and services. | |d. |take the difference between the market values of all final goods and services and the co sts of producing those final | | |goods and services. ANS:CDIF:2REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Interpretive 4. GDP adds together many different kinds of products into a single measure of the value of economic activity by using prices determined by |a. |banks. | |b. |economists. | |c. |the government. | |d. |markets. | ANS:DDIF:2REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Interpretive 5. In order to include many different goods and services in an aggregate measure, GDP is computed using, primarily, |a. values of goods and services based on surveys of consumers. | |b. |market prices. | |c. |consumer and producer surpluses. | |d. |costs of producing goods and services. | ANS:BDIF:2REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Interpretive 6. Gross domestic product adds together many different kinds of goods and services into a single measure of the value of economic activity. To do this, GDP makes use of |a. |market prices. | |b. |prices that government economists believe reflect the true value of goods and services to society. |c. |the assumption that quantities of goods and services produced are unchanged from year to year. | |d. |the assumption that prices of goods and services are unchanged from year to year. | ANS:ADIF:2REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Interpretive 7. In computing GDP, market prices are used to value final goods and services because |a. |market prices do not change much over time, so it is easy to make comparisons between years. | |b. |market prices reflect the values of goods and services. | |c. if market prices are out of line with how people value goods, the government sets price ceilings and price floors. | |d. |None of the above is correct; market prices are not used in computing GDP. | ANS:BDIF:2REF:23-2 NAT:AnalyticLOC:The study of economic s and definitions of economics TOP:GDPMSC:Interpretive 8. If the price of a DVD player is three times the price of a CD player, then a DVD player contributes |a. |more than three times as much to GDP as does a CD player. | |b. |less than three times as much to GDP as does a CD player. | |c. |exactly three times as much to GDP as does a CD player. | |d. to GDP but a CD player does not contribute to GDP. | ANS:CDIF:2REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Applicative 9. Which of the following is correct? |a. |The market value of rental housing services is included in GDP, but the market value of owner-occupied housing services | | |is not. | |b. |The market value of owner-occupied housing services is included in GDP, but the market value of rental housing services | | |is not. | |c. |The market values of both owner-occupied housing services and rental housing services are included in GDP. | |d. Neither the market value of owner-occupied housing services nor the market value of rental housing services is included | | |in GDP. | ANS:CDIF:2REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Interpretive 10. The value of the housing services provided by the economy's owner-occupied houses is |a. |included in GDP, and the estimated rental values of the houses are used to place a value on these housing services. | |b. |included in GDP, and the actual mortgage payments made on the houses are used to estimate the value of these rental | | |services. | |c. excluded from GDP since these services are not sold in any market. | |d. |excluded from GDP since the value of these housing services cannot be estimated with any degree of precision. | ANS:ADIF:2REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Interpretive 11. Suppose an apartment complex converts to a condominium, so that the former renters are now owners of their housing units. Suppose further t hat a current estimate of the value of the condominium owners' housing services is the same as the rent they previously paid. What happens to GDP as a result of this conversion? a. |GDP necessarily increases. | |b. |GDP necessarily decreases. | |c. |GDP is unaffected because neither the rent nor the estimate of the value of housing services is included in GDP. | |d. |GDP is unaffected because previously the rent payments were included in GDP and now the rent payments are replaced in | | |GDP by the estimate of the value of housing services. | ANS:DDIF:2REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Applicative 12. James owns two houses. He rents one house to the Johnson family for $10,000 per year. He lives in the other house.If he were to rent the house in which he lives, he could earn $12,000 per year in rent by doing so. How much do the housing services provided by the two houses contribute to GDP? |a. |$0 | |b. |$10,000 | |c. |$12,000 | | d. |$22,000 | ANS:DDIF:2REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Applicative 3. GDP excludes most items that are produced and sold illegally and most items that are produced and consumed at home because |a. |the quality of these items is not high enough to contribute value to GDP. | |b. |measuring them is so difficult. | |c. |the government wants to discourage the production and consumption of these items. | |d. |these items are not reported on income tax forms. | ANS:BDIF:2REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Interpretive 14. Estimates of the values of which of the following non-market goods or services are included in GDP? |a. the value of unpaid housework | |b. |the value of vegetables and other foods that people grow in their gardens | |c. |the estimated rental value of owner-occupied homes | |d. |All of the above are included in GDP. | ANS:CDIF:2REF:23-2 NAT:AnalyticLOC:The study o f economics and definitions of economics TOP:GDPMSC:Applicative 15. Over the last few decades, Americans have chosen to cook less at home and eat more at restaurants. This change in behavior, by itself, has |a. |reduced measured GDP. |b. |not affected measured GDP. | |c. |increased measured GDP only to the extent that the value of the restaurant meals exceeded the value of meals previously | | |cooked at home. | |d. |increased measured GDP by the full value of the restaurant meals. | ANS:DDIF:2REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Applicative 16. Over time, people have come to rely more on market-produced goods and less on goods that they produce for themselves. For example, busy people with high incomes, rather than cleaning their own houses, hire people to clean their houses.By itself, this change has |a. |caused measured GDP to fall. | |b. |not caused any change in measured GDP. | |c. |caused measured GDP to rise. | |d. |probably changed measured GDP, but in an uncertain direction; the direction of the change depends on the difference in | | |the quality of the cleaning that has resulted. | ANS:CDIF:2REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Applicative 17. Ralph pays someone to mow his lawn, while Mike mows his own lawn. Regarding these two practices, which of the following statements is correct? a. |Only Ralph’s payments are included in GDP. | |b. |Ralph’s payments as well as the estimated value of Mike’s mowing services are included in GDP. | |c. |Neither Ralph’s payments nor the estimated value of Mike's mowing services is included in GDP. | |d. |Ralph’s payments are definitely included in GDP, while the estimated value of Mike’s mowing services is included in GDP | | |only if Mike voluntarily provides his estimate of that value to the government. | ANS:ADIF:2REF:23-2 NAT:AnalyticLOC:The study of economics and definit ions of economics TOP:GDPMSC:Applicative 18.If Susan switches from going to Speedy Lube for an oil change to changing the oil in her car herself, then GDP |a. |necessarily rises. | |b. |necessarily falls. | |c. |will be unaffected because the same service is produced in either case. | |d. |will be unaffected because car maintenance is not included in GDP. | ANS:BDIF:2REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Applicative 19. Which of the following is not included in GDP? |a. |carrots grown in your garden and eaten by your family | |b. carrots purchased at a farmer’s market and eaten by your family | |c. |carrots purchased at a grocery store and eaten by your family | |d. |More than one of the above is not included in GDP. | ANS:ADIF:2REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Applicative 20. A professional gambler moves from a state where gambling is illegal to a state where gambling is legal. Most of his income was, and continues to be, from gambling.His move |a. |necessarily raises GDP. | |b. |necessarily decreases GDP. | |c. |doesn't change GDP because gambling is never included in GDP. | |d. |doesn't change GDP because in either case his income is included. | ANS:ADIF:2REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Applicative 21. If a state made a previously-illegal activity, such as gambling or prostitution, legal, then, other things equal, GDP |a. |necessarily decreases. | |b. |necessarily increases. | |c. |doesn't change because both legal and illegal production are included in GDP. | |d. doesn't change because these activities are never included in GDP. | ANS:BDIF:2REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Applicative 22. Which of the following is included in GDP? |a. |medical marijuana purchased from a government-run pharmacy by a glaucoma patient | |b. |recreational ma rijuana purchased from a drug dealer by a college student | |c. |recreational marijuana produced and consumed by a man in his attic | |d. All of the above are included in GDP. | ANS:ADIF:2REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Applicative 23. Marijuana is an illegal good and broccoli is a legal good. Which of the following statements is true? |a. |Darin grows and sells marijuana to Lisa. When Darin and Lisa get married, GDP falls. | |b. |Darin grows and sells marijuana to Lisa. When Darin and Lisa get married, GDP rises. | |c. |Darin grows and sells broccoli to Lisa. When Darin and Lisa get married, GDP falls. | |d. |Darin grows and sells broccoli to Lisa. When Darin and Lisa get married, GDP rises. ANS:CDIF:2REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Applicative 24. Spots, Inc. produces ink and sells it to Write on Target, which makes pens. The ink produced by Spots, Inc. is called |a. |an inventory good. | |b. |a transitory good. | |c. |a preliminary good. | |d. |an intermediate good. | ANS:DDIF:1REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:Intermediate goodsMSC:Definitional 25. Which of the following statements is correct? |a. |The value of intermediate goods is always included in GDP. | |b. The value of intermediate goods is included in GDP only if those goods were produced in the previous year. | |c. |The value of intermediate goods is included in GDP only if those goods are added to firms’ inventories to be used or | | |sold at a later date. | |d. |The value of intermediate goods is never included in GDP. | ANS:CDIF:2REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDP | Intermediate goodsMSC:Interpretive 26. Grapes are |a. |always counted as an intermediate good. | |b. |counted as an intermediate good only if they are used to produce another good, such as wine. | |c. counted as an interm ediate good only if they are consumed. | |d. |counted as an intermediate good, whether they are used to produce another good or consumed. | ANS:BDIF:2REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:Intermediate goodsMSC:Applicative 27. Gasoline is considered a final good if it is sold by a |a. |gasoline station to a bus company that operates a bus route between San Francisco and Los Angeles. | |b. |pipeline operator to a gasoline station in San Francisco. | |c. |gasoline station to a motorist in Los Angeles. | |d. |All of the above are correct. | ANS:CDIF:2REF:23-2NAT:AnalyticLOC:The study of economics and definitions of economics TOP:Intermediate goodsMSC:Applicative 28. A steel company sells some steel to a bicycle company for $150. The bicycle company uses the steel to produce a bicycle, which it sells for $250. Taken together, these two transactions contribute |a. |$150 to GDP. | |b. |$250 to GDP. | |c. |between $250 and $400 to GDP, depending on the profit earned by the bicycle company when it sold the bicycle. | |d. |$400 to GDP. | ANS:BDIF:2REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDP | Intermediate goodsMSC:Applicative 9. Al’s Aluminum Company sells $1 million worth of aluminum to Shiny Foil Company, which uses the aluminum to make aluminum foil. Shiny Foil Company sells $4 million worth of aluminum foil to households. The transactions just described contribute how much to GDP? |a. |$1 million | |b. |$3 million | |c. |$4 million | |d. $5 million | ANS:CDIF:2REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDP | Intermediate goodsMSC:Applicative 30. One bag of flour is sold for $1. 00 to a bakery, which uses the flour to bake bread that is sold for $3. 00 to consumers. A second bag of flour is sold to a consumer in a grocery store for $2. 00. Taking these three transactions into account, what is the effect on GDP? |a. |GDP increases by $2. 00. | |b. |GDP increases by $3. 00. | |c. |GDP increases by $5. 00. | |d. |GDP increases by $6. 00. | ANS:CDIF:3REF:23-2NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDP | Intermediate goodsMSC:Analytical 31. Suppose there are only two firms in an economy: Cowhide, Inc. produces leather and sells it to Couches, Inc. , which produces and sells leather furniture. With each $1,000 of leather that it buys from Cowhide, Inc. , Couches, Inc. produces a couch and sells it for $3,000. Neither firm had any inventory at the beginning of 2006. During that year, Cowhide produced enough leather for 20 couches. Couches, Inc. bought 80% of that leather for $16,000 and promised to buy the remaining 20% for $4,000 in 2007.Couches, Inc. produced 16 couches during 2006 and sold each one during that year for $3,000. What was the economy's GDP for the 2006? |a. |$48,000 | |b. |$52,000 | |c. |$64,000 | |d. |$68,000 | ANS:BDIF:3REF:23-2 NAT:AnalyticLOC:The study of economics and def initions of economics TOP:GDP | Intermediate goodsMSC:Analytical 32.Suppose there are only two firms in an economy: Rolling Rawhide produces rawhide and sells it to Chewy Chomp, Inc. , which uses the rawhide to produce and sell dog chews. With each $2 of rawhide that it buys from Rolling Rawhide, Chewy Chomp, Inc. produces a dog chew and sells it for $5. Neither firm had any inventory at the beginning of 2007. During that year, Rolling Rawhide produced enough rawhide for 1000 dog chews. Chewy Chomp, Inc. bought 75% of that rawhide for $1500 and promised to buy the remaining 25% for $500 in 2008. Chewy Chomp, Inc. produced 750 dog chews during 2007 and sold each one during that year for $5.What was the economy's GDP for 2007? |a. |$3750 | |b. |$4250 | |c. |$5250 | |d. |$5750 | ANS:BDIF:3REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDP | Intermediate goodsMSC:Analytical 33.In 2007, Corny Company grows and sells $2 million worth of corn to Tasty Cere al Company, which makes corn flakes. Tasty Cereal Company produces $6 million worth of corn flakes in 2007, with sales to households during the year of $4. 5 million. The unsold $1. 5 million worth of corn flakes remains in Tasty Cereal Company’s inventory at the end of 2007. The transactions just described contribute how much to GDP for 2007? |a. |$4. 5 million | |b. |$6 million | |c. |$6. million | |d. |$8 million | ANS:BDIF:3REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDP | Intermediate goodsMSC:Analytical 34. The total sales of all firms in the economy for a year |a. |equals GDP for the year. | |b. |is larger than GDP for the year. | |c. |is smaller than GDP for the year. | |d. |Any of the above is possible. | ANS:BDIF:3REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDP | Intermediate goodsMSC:Analytical 35.Which of the following domestically produced items is not included in GDP? |a. |a bottle of sham poo | |b. |a hairdryer | |c. |a haircut | |d. |All of the above are included in GDP. | ANS:DDIF:2REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Applicative 36. Which of the following is not included in GDP? |a. |a can of bug spray | |b. the services of an exterminator | |c. |the honey produced and sold by a beekeeper | |d. |All of the above are included in GDP. | ANS:DDIF:2REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Applicative 37. Gross domestic product includes all |a. |legal and illegal goods, but it excludes all legal and illegal services. | |b. |legal and illegal goods and all legal and illegal services. |c. |legal goods and services, but it excludes illegal goods and services. | |d. |legal and illegal goods and legal services, but it excludes illegal services. | ANS:CDIF:2REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Interpretive 38. Transactions invol ving items produced in the past, such as the sale of a 5-year-old automobile by a used car dealership or the purchase of an antique rocking chair by a person at a yard sale, are |a. |included in current GDP because GDP measures the value of all goods and services sold in the current year. | |b. included in current GDP but valued at their original prices. | |c. |not included in current GDP because GDP only measures the value of goods and services produced in the current year. | |d. |not included in current GDP because these items have no current value. | ANS:CDIF:2REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Applicative 39. Which of the following events would cause GDP for 2007 to increase? |a. |In February 2007, Amanda sells a 1996 Honda Accord to Isabella. | |b. |In February 2007, Amanda buys a ticket to visit a zoo in Florida. She visits the zoo in April 2007. |c. |In December 2007, Isabella eats onions that she harvested from her backyar d garden in October 2007. | |d. |All of the above are correct. | ANS:BDIF:2REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Applicative 40. Until recently, George lived in a home that was newly constructed in 2005. In 2005, he paid $200,000 for the brand new house. He sold the house in 2006 for $225,000. Which of the following statements is correct regarding the sale of the house? |a. |The 2006 sale increased 2006 GDP by $225,000 and had no effect on 2005 GDP. | |b. The 2006 sale increased 2006 GDP by $25,000 and had no effect on 2005 GDP. | |c. |The 2006 sale increased 2006 GDP by $225,000; furthermore, the 2006 sale caused 2005 GDP to be revised upward by | | |$25,000. | |d. |The 2006 sale affected neither 2005 GDP nor 2006 GDP. | ANS:DDIF:2REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Applicative 41. Tyler and Camille both live in Oklahoma. A new-car dealer in Oklahoma bought a new car from the manuf acturer for $18,000 and sold it to Tyler for $22,000. Later that year, Tyler sold the car to Camille for $17,000.By how much did these transactions contribute to U. S. GDP for the year? |a. |$18,000 | |b. |$22,000 | |c. |$39,000 | |d. |$57,000 | ANS:BDIF:3REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Analytical 42.Consider two cars manufactured by Chevrolet in 2007. During 2007, Chevrolet sells one of the two cars to Sean for $24,000. Later in the same year, Sean sells the car to Kati for $19,000. The second automobile, with a market value of $30,000, is unsold at the end of 2007 and it remains in Chevrolet’s inventory. The transactions just described contribute how much to GDP for 2007? |a. |$24,000 | |b. |$43,000 | |c. $54,000 | |d. |$73,000 | ANS:CDIF:3REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Analytical 43. Which of the following is included in U. S. GDP? |a. |the value of production b y an American working in Morocco | |b. |the value of production by a Moroccan working in the U. S. | |c. |Both (a) and (b) are correct. | |d. |Neither (a) nor (b) is correct. ANS:BDIF:2REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Applicative 44. Anna, a U. S. citizen, works only in Germany. The value she adds to production in Germany is included |a. |in both German GDP and U. S. GDP. | |b. |in German GDP, but it is not included in U. S. GDP. | |c. |in U. S. GDP, but it is not included in German GDP. | |d. |in neither German GDP nor U. S. GDP. | ANS:BDIF:2REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Applicative 45. An American company operates a fast food restaurant in Romania.Which of the following statements is accurate? |a. |The value of the goods and services produced by the restaurant is included in both Romanian GDP and U. S. GDP. | |b. |One-half of the value of the goods and services produced by the restaurant is included in Romanian GDP, and the other | | |one-half of the value is included in U. S. GDP. | |c. |The value of the goods and services produced by the restaurant is included in Romanian GDP, but not in U. S. GDP. | |d. |The value of the goods and services produced by the restaurant is included in U. S. GDP, but not in Romanian GDP. ANS:CDIF:2REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Applicative 46. Quality Motors is a Japanese-owned company that produces automobiles; all of its automobiles are produced in American plants. In 2007, Quality Motors produced $20 million worth of automobiles, with $12 million in sales to Americans, $6 million in sales to Canadians, and $2 million worth of automobiles added to Quality Motors’ inventory. The transactions just described contribute how much to U. S. GDP for 2007? |a. |$12 million | |b. $14 million | |c. |$20 million | |d. |$34 million | ANS:CDIF:3REF:23-2 NAT:Analyti cLOC:The study of economics and definitions of economics TOP:GDPMSC:Analytical 47. Which of the following items is included in U. S. GDP? |a. |goods produced by foreign citizens working in the United States | |b. the difference in the price of the sale of an existing home and its original purchase price | |c. |known illegal activities | |d. |None of the above is included in U. S. GDP. | ANS:ADIF:2REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Interpretive 48. Which of the following items is included in U. S. GDP? |a. |final goods and services that are purchased by the U. S. federal government | |b. |intermediate goods that are produced in the U. S. ut that are unsold at the end of the GDP accounting period | |c. |goods and services produced by foreign citizens working in the U. S. | |d. |All of the above are included in U. S. GDP. | ANS:DDIF:2REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Interpretive 49. Which of the following items is included in U. S. GDP? |a. |the estimated value of production accomplished at home, such as backyard production of fruits and vegetables | |b. |the value of illegally-produced goods and services | |c. the value of cars and trucks produced in foreign countries and sold in the U. S. | |d. |None of the above is included in U. S. GDP. | ANS:DDIF:2REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Applicative 50. Which of the following is not included in U. S. GDP? |a. |unpaid cleaning and maintenance of houses | |b. |services such as those provided by lawyers and hair stylists | |c. the estimated rental value of owner-occupied housing | |d. |production of foreign citizens living in the United States | ANS:ADIF:2REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Applicative 51. Which of the following values would be included in U. S. GDP for 2006? |a. |the rent that John, an Amer ican citizen, would have paid on his home in New York in 2006 had he not owned that home | |b. the rent that Sarah, an American citizen, paid on her apartment in San Francisco in 2006 | |c. |the value of the legal services provided by Carlos, an attorney and a Mexican citizen, who lived in Houston and | | |practiced law there in 2006 | |d. |All of the above would be included in U. S. GDP for 2006. | ANS:DDIF:2REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Applicative 52.Which of the following examples of production of goods and services would be included in U. S. GDP? |a. |Samantha, a Canadian citizen, grows sweet corn in Minnesota and sells it to a grocery store in Canada. | |b. |Ian, an American citizen, grows peaches for his family in the back yard of their Atlanta home. | |c. |Leo, an American citizen, grows marijuana in his Seattle home and sells it to his friends and neighbors. | |d. |None of the above examples of production would be in cluded in U. S. GDP. | ANS:ADIF:2REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Applicative 3. Which of the following transactions adds to U. S. GDP for 2006? |a. |In 2006, Ashley sells a car that she bought in 2002 to William for $5,000. | |b. |An American management consultant works in Mexico during the summer of 2006 and earns the equivalent of $30,000 during | | |that time. | |c. |When John and Jennifer were both single, they lived in separate apartments and each paid $750 in rent. John and | | |Jennifer got married in 2006 and they bought a house that, according to reliable estimates, could be rented for $1,600 | | |per month. | |d. |None of the above transactions adds to U.S. GDP for 2006. | ANS:CDIF:2REF:23-2 NAT:AnalyticLOC:The study of economics and definitions of economics TOP:GDPMSC:Applicative 54. Which of the following transactions adds to U. S. GDP for 2006? |a. |In 2006, Marvin Windows manufactures 20 windows that will eventual ly be installed in an office building in Minneapolis. | | |The windows remain in Marvin’s inventory at the end of 2006. | |b. |An Irish marketing consultant works in Boston during the summer of 2006 and earns $30,000 during that time. | |c.

An Analysis of 13 Days

Professor O’Neill Atlantic Worlds II April 16th 2010 Characterizing the First World War as an epidemic of miscalculation, President John F. Kennedy pondered, â€Å"they somehow seemed to tumble into war †¦ through stupidity, individual idiosyncrasies, misunderstandings, and personal complexes of inferiority and grandeur† (49). Reflecting upon these miscalculations, Robert F. Kennedy’s Thirteen Days documents the Cuban Missile Crisis and catalogues the President’s contemplative action amidst potential disaster.Considering the misjudgment that drove conflict in the early twentieth century, and the socio-technological paradigm shift of war, President Kennedy found remedy in the maintenance of open channels of external communication, while regarding the international domino effect of each action, and exhibiting constant skepticism in pursuit of a peaceful resolution. German sociologist Max Weber wrote of the Great War, â€Å"this war, with all its ghastl iness, is nevertheless grand and wonderful. It is worth experiencing† (EP 768).Embellishing the heroism of warfare, Weber reflects a common acceptance of war in the early twentieth century as one of sport and necessity. However, with the development of nuclear arms came a paradigm shift concerning war and its role amid international powers. Acknowledging the destructive potential of nuclear warfare, Kennedy adamantly stated, â€Å"We were not going to misjudge or challenge the other side needlessly, or precipitously push our adversaries into a course of action that was not intended† (75).Using historical precedent as his guide, President Kennedy acts upon the belief that war is rarely intentional, while also recognizing the evolving dynamic of war as one of an arms struggle. The application of this lesson exists in Kennedy’s resolution to utilize quarantine as opposed to armed conflict at the Soviets Union’s initial threat. Foreign ships given orders to re treat would be afforded such an opportunity, any vessel refusing to stop would have its rudders disabled to avoid loss of life, and ships not belonging to the Soviet Union were the irst and only to be boarded, as to not incite a military response. Executing such action demonstrates the President’s clear understanding of past misjudgment, and the paradigm shift that now characterized war as something not of sport, but of mass destruction. Robert Kennedy reaffirms such in declaring, â€Å"If we erred, we erred not only for ourselves and our country, but for the lives of those who had never been given an opportunity to play a role† (81). This statement epitomizes the overwhelming burden of nuclear war, and the cognizance necessary to avoid it.Vital to the avoidance of miscalculation and the development of a mutual understanding were open channels of communication during the Cuban Crisis. President Kennedy recognized the importance of consistent communication to evade impu lsive action, and promote logically sound decision-making. Such an example exists in Robert Kennedy’s Thirteen Days in which Soviet Chairman Khrushchev and President Kennedy exchange messages outlining the guidelines towards peaceful resolution. We must not succumb to petty passions, or to transient things, but should realize that if indeed war should break out, then it would not be in our power to stop it, for such is the logic of war† (66). Stated by Khrushchev in pursuit of mutual amity, such communication demonstrates the importance of clarity and transparency under desperate circumstances. This quotation further exhibits recognition of the warped nature of warfare, and acknowledges history’s wrongdoings that provoked destruction.President Kennedy concluded deliberations in stating, â€Å"the effect of such a settlement on easing world tensions would enable us to work towards a more general arrangement †¦ the United States is very much interested in red ucing tensions and halting the arms race† (79). The clear and concise nature of this exchange lends praise to the diplomatic nature of Kennedy’s tactics, providing both the United States and Soviet Union with the opportunity to ultimately avoid nuclear holocaust. The snowball effect exhibited through the First World War demonstrates the danger of tumbling into conflict through allied obligation and diplomatic stupidity.President Kennedy’s ability to tactfully neutralize the Cuban Crisis demonstrates an awareness of that danger, and an appreciation for the international domino effect that warfare would generate between nations. Strongly stated by Robert Kennedy, â€Å"we had to be aware of this responsibility at all times, aware that we were deciding for the United States, the Soviet Union, NATO, and for all of mankind† (75). Such concern for the global repercussion of warfare can be observed in President Kennedy’s constant scrutiny of military recom mendations and their effect upon the entire western hemisphere.Seeking alternative solutions to war as well as the approval of global powers, Robert Kennedy further states, â€Å"we were able to establish a firm legal foundation for our action under the OAS charter, and our position around the world was †¦ unanimously supported for a quarantine† (40). This diplomatic strategy, founded upon the support of strong European and American allies, aided the United States in considering the implications of all possible courses of action as to ensure a promise of peace for themselves and the global community.A final strategy, central to the diplomatic triumph of the Cuban Missile Crisis, refers to the establishment and success of Kennedy’s Executive Committee of the National Security Council. While each proposed solution held inherent weaknesses, this committee would allow for constant deliberation, argument, and debate. The ability to scrutinize each proposal reinforced a reasonable decision-making process, thereby diminishing the risk of the impulsive miscalculation or misjudgment that had prompted war only decades earlier.Embodying the significance of the Executive Committee, Robert Kennedy declares, â€Å"everyone had an equal opportunity to express himself and to be heard directly. It was a tremendously advantageous procedure that does not frequently occur within the executive branch† (36). Furthermore, President Kennedy is reported to have gone through â€Å"considerable lengths to ensure that he was not insulated from individuals or points of view because of rank or position† (89).While such an arrangement seems idealistic, President Kennedy’s recognition of all available viewpoints provided an extremely broad base of knowledge upon which to draw conclusions. It was this open-minded and reasonable approach that was heavily lacking prior to the Great Wars of the early twentieth century, thereby leading to global disasters t hat may have been averted under more logical circumstances. The measures taken by President Kennedy, as presented through Robert Kennedy’s Thirteen Days, lend overwhelming praise to his diplomatic triumph during the Cuban Missile Crisis.His success is reported as being founded upon the miscalculations of history, and a correction of those past errors in pursuit of peaceful relations. However, the idealistic manner in which the President’s actions are portrayed reek of both brotherly admiration and posthumous praise. Such a utopian presentation only serves to diminish President Kennedy’s heroic role amidst the crisis, and leads the reader to question how pivotal his leadership actually was. A personal memoir of Robert F. Kennedy, Thirteen Days must be read with a grain of salt to properly assess its validity as a historical record.While the President certainly acknowledged the socio-technological paradigm shift of modern warfare in addition to the stupidity from which the First World War emerged, Thirteen Days most obviously dismisses crucial events preceding the Cuban Missile Crisis. The Bay of Pigs Invasion, an unsuccessful attempt by American-trained Cuban refugees to overthrow the government of Fidel Castro, completely contradicts President Kennedy’s supposed cognizance of the dangers of nuclear war and impulsive military action.The failed invasion, initiated only three months after President Kennedy’s inauguration, humiliated the Administration and made communist nations distrustful of the United States. In addition, John F. Kennedy is consistently praised throughout his brother’s memoir for welcoming the viewpoints of not just government administrators, but regular people. For example, â€Å"he wanted the advice of his Cabinet officers, but he also †¦ wished to hear from Tommy Thompson† (89). However, not once throughout Kennedy’s memoir does he mention speaking to field soldiers or their names. The generic label of Tommy Thompson reduces the author’s faith in such sources, and President Kennedy is even shown to mock military figures in stating, they â€Å"lacked the ability to look beyond the limited military field† (90). Such evidence cannot be overlooked in determining the validity of President Kennedy’s success, and reduces the objectivity of this historical source. However, the ultimate success of President Kennedy’s historical reflections and peace-seeking measures cannot be denied.While Thirteen Days nearly emits audible applause for his actions, it accurately reports the measures taken to subdue the Cuban Missile Crisis, the effectiveness of quarantine and the importance of bargaining and communication. These actions, prompted through the establishment of the Executive Committee, resulted in the removal of nuclear arms from Cuba and the reestablishment of the global status quo. Rescuing our nation on the brink of nuclear war, the reader h as no choice but to close Thirteen Days with a deeper admiration for the courage and wisdom of President Kennedy.