Economic Analysis and Public Policy

Why should economists use several indicators to assess New Jersey living standards?

• All indicators always move identically
• GDP, household income, employment, and housing costs show different things
• Only total coastline length matters
• GDP alone reveals every family’s savings

How is an industry’s share of New Jersey GDP calculated?

• Its value added divided by state GDP for a comparable period
• Its employee count divided by miles of coastline
• Its profit divided by the number of counties
• Its gross sales multiplied by population

What is essential when comparing New Jersey GDP with New York or Pennsylvania?

• Ignoring revisions and sources
• Comparing one state’s quarter with another’s full year
• Mixing current dollars with chained dollars without explanation
• Using consistent years and price measures

Why can earlier New Jersey GDP figures change in later publications?

• GDP values are constitutionally fixed forever
• Only the postal abbreviation changes
• BEA revises estimates when new data or methods become available
• Economic surveys are never updated

Why does a rise in current-dollar GDP not necessarily imply equally large real growth?

• Output must double every year
• Price increases can raise nominal values
• Real GDP always equals nominal GDP
• Nominal GDP excludes inflation by definition

Which environmental issue can be overlooked by GDP alone?

• Pollution and ecosystem costs of development
• State government purchases
• Annual manufacturing value added
• Measured market services

What public-policy challenge accompanies heavily used New Jersey ports and roads?

• Keeping infrastructure free from all wear forever
• Removing all safety requirements
• Eliminating public investment entirely
• Balancing commerce with maintenance, congestion, and land use

How can universities help New Jersey’s advanced industries?

• By eliminating the need for health workers
• By preventing scientific collaboration
• By producing research and skilled graduates
• By replacing all manufacturers with libraries

Why is New Jersey state GDP different from New York metropolitan GDP?

• The geographic boundaries of the measures differ
• Metropolitan GDP counts only cities in New Jersey
• They use identical geographic boundaries
• State GDP measures only taxes