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Exam 12: Gdp: Measuring Total Production and Income

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Question 121

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How are intermediate goods treated in the calculation of GDP?

A) Their value is not counted separately, but included as part of the value of the final good for which they are an input.
B) Their value is counted separately, and their value is also included as part of the value of the final good for which they are an input.
C) Their value is counted separately, but is not included as part of the value of the final good for which they are an input.
D) They are included only if they are imported.

E) A) and D)
F) A) and B)

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Question 122

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Table 12-30 $\begin{array} { | l | r | } \hline & \begin{array} { c } \text { Billions of } \\\text { Dollars }\end{array} \\\hline \text { GDP } & \$ 3,250 \\\hline \text { Depreciation } & 300 \\\hline \text { Retained } & \\\text { earnings } & 1,000 \\\hline \text { Personal tax } & \\\text { payments } & 500 \\\hline \text { Transfer } & \\\text { payments } & 80\\\hline\end{array}$ -Refer to Table 12-30.Based on the table above,what is personal income for this economy?

A) $1,950 billion
B) $2,250 billion
C) $2,450 billion
D) $5,130 billion

E) A) and B)
F) A) and D)

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Question 123

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Table 12-17 $\begin{array} { | l | c | c | c | c | } \hline & { \mathbf { 2 0 0 6 } } && \mathbf { 2 0 1 3 } & \\\hline \text { Product } & \text { Quantity } & \text { Price } & \text { Quantity } & \text { Price } \\\hline \text { Movies } & 20 & \$ 6.00 & 30 & \$ 7.00 \\\hline \text { Burgers } & 100 & 2.00 & 90 & 2.50 \\\hline \text { Bikes } & 3 & 1,000.00 & 6 & 1,100.00 \\\hline\end{array}$ A very simple economy produces three goods: movies, burgers, and bikes.The quantities produced and their corresponding prices for 2006 and 2013 are shown in the table above. -Refer to Table 12-17.What is nominal GDP in 2006?

An example of business fixed investment spending is

The "underground economy" is also referred to as

In the United States in 2013,the Bureau of Economic Analysis began counting spending by firms and individuals on developing entertainment products as investment.This change will

For developed countries like the United States,GDP will always exceed GNP.

Table 12-17 $\begin{array} { | l | c | c | c | c | } \hline & { \mathbf { 2 0 0 6 } } && \mathbf { 2 0 1 3 } & \\\hline \text { Product } & \text { Quantity } & \text { Price } & \text { Quantity } & \text { Price } \\\hline \text { Movies } & 20 & \$ 6.00 & 30 & \$ 7.00 \\\hline \text { Burgers } & 100 & 2.00 & 90 & 2.50 \\\hline \text { Bikes } & 3 & 1,000.00 & 6 & 1,100.00 \\\hline\end{array}$ A very simple economy produces three goods: movies, burgers, and bikes.The quantities produced and their corresponding prices for 2006 and 2013 are shown in the table above. -Refer to Table 12-17.What is real GDP in 2013,using 2006 as the base year?

Presently,GDP is ________ to compensate for the costs of environmental damage.

The purchase of a new house is included in

Which of the following equations correctly measures GDP in an economy?

If a U.S.firm produces cars in Mexico,that production should count towards

If the value added of a firm is positive,will the firm necessarily have positive profits?

In the circular flow diagram,________ supply the factors of production,and ________ goods and services.

Table 12-27 $\begin{array} { | l | r | } \hline \text { National income } & \$ 1,000 \\\hline \text { Retained earnings not paid as dividends } & 50 \\\hline \text { Transfer payments } & 40 \\\hline \text { Interest on government bonds } & 20 \\\hline \text { Personal taxes } & 30 \\\hline\end{array}$ The components of national income for an economy are represented in Table 12-27 above.All values are in billions of dollars. -Refer to Table 12-27.What is the level of personal income for this economy?

National income equals gross domestic product

Gross domestic product understates the total production of final goods and services because of the omission of

Which of the following would not be included in the expenditure category called investment expenditures?

When consumers are less confident about their jobs or incomes,they are more likely to

Gross national product is defined as