2. Suppose a woman marries her butler. After they are married, her husband continues to wait on her as before, and she continues to support him as before (but as a husband rather than as an employee). How does the marriage affect GDP? How do you think it should affect GDP? 3. Matrina is the sole owner of Matrina's Lawn Mowing, Incorporated (MLM). In one year, MLM collects ZMW1,000,000 from customers to mow their lawns. MLM's equipment depreciates in value by ZMW125,000. MLM pays ZMW600,000 to its workers, who pay ZMW 140,000 in taxes on this income. MLM pays ZMW50,000 in corporate income taxes and pays Matrina a dividend of ZMW150,000. Matrina pays taxes of ZMW60,000 on this dividend income. MLM retains ZMW75,000 of earnings in the business to finance future expansion. How much does this economic activity contribute to each of the following? i. GDP ii. NNP iii. National income iv. Compensation of employees v. Proprietors' income vi. Corporate profits vii. Personal income viii. Disposable personal income 4. What are the four components of GDP? Give an example of each. 5. What does the consumer price index measure? List three ways in which it differs from the GDP deflator.

**Question 2: Marriage and GDP** - **Impact on GDP:** Marriage reduces GDP by the value of the butler's services since they are no longer paid for monetarily. - **How it should affect GDP:** Ideally, GDP should account for household production, but it doesn't, leading to an underestimation. **Question 3: Economic Activity Contribution** 1. **GDP:** ZMW1,000,000 2. **NNP:** ZMW875,000 3. **National Income:** ZMW815,000 4. **Compensation of Employees:** ZMW600,000 5. **Proprietors' Income:** ZMW90,000 6. **Corporate Profits:** ZMW125,000 7. **Personal Income:** ZMW780,000 8. **Disposable Personal Income:** ZMW720,000 **Question 4: Four Components of GDP** 1. **Consumption (C):** Expenditure by households on goods and services (e.g., buying groceries). 2. **Investment (I):** Spending on capital goods (e.g., a company purchasing new machinery). 3. **Government Spending (G):** Expenditures by the government on goods and services (e.g., infrastructure projects). 4. **Net Exports (NX):** Exports minus imports (e.g., a country exporting cars while importing electronics). **Question 5: Consumer Price Index (CPI)** - **What CPI Measures:** Average change over time in the prices of a fixed basket of consumer goods and services. - **Differences from GDP Deflator:** 1. **Scope:** CPI focuses on consumer goods and services, while the GDP deflator includes all goods and services produced domestically. 2. **Base Year:** CPI uses a fixed basket, whereas the GDP deflator uses a changing basket based on current production. 3. **Calculation Method:** CPI is based on price changes of a fixed basket, while the GDP deflator uses the ratio of nominal GDP to real GDP. This summary provides clear and concise answers to each of your questions without making judgments.