Suppose Smith pays $100 to Jones
  • when gross investment exceeds replacement investment
  • We need more information to determine whether GDP has changed.
  • The purchase of 100 shares of AT&T by a retired business executive.
  • a check for $250 sent by parents to a daughter at college
Which of the following transactions would be included in GDP?
  • a check for $250 sent by parents to a daughter at college
  • Spending on meals by consumers at restaurants
  • The purchase of 100 shares of AT&T by a retired business executive.
  • Peter buys a newly constructed house.
In 2012, Trailblazer Bicycle Company produced a mountain bike that was delivered to a retail outlet in NovemberThe bicycle was sold to E.Z. Ryder in MarchThis bicycle is counted as
  • the child-care services provided by a stay at home parent.
  • the production of 1933's GDP used up more capital goods than were produced in that year.
  • investment in 2012 and as a negative investment in 2013
  • when gross investment exceeds replacement investment
Year Units of Output Price Per Unit1 20 $42 25 43 30 6 Assume an economy that is producing only one product. Output and price data for a three-year period are shown in the table. If year 2 is chosen as the base year, the price index for year 1 is
  • some year before 2000
  • 100
  • 60
  • 300
If in some year gross investment was $120 billion and net investment was $65 billion, then in that year the country's capital stock
  • increase by $60 billion
  • The purchase of a new house.
  • any increase in business inventories
  • increased by 65 billion.
In calculating GDP, governmental transfer payments, such as Social Security or unemployment compensation, are
  • $3,237 billion
  • automobiles for personal use but not houses.
  • GDP would be overstated.
  • not counted.
In determining real GDP, economists adjust the nominal GDP by using the
  • GDP price index
  • net exports
  • GDP would be overstated.
  • consumption
Gross Investment $18National Income 100Net Exports 2Personal Income 85Personal Consumption Expenditures 70Saving 5Government Purchases 20Net Domestic Product 105Statistical Discrepancy 0 Refer to the accompanying data (all figures in billions of dollars). Consumption of fixed capital is
  • $380
  • $623
  • $5
  • 44%
Year Units of Output Price of Bagel Per Unit Price Index (Year 1 = 100)1 10 $10 1002 12 20 2003 15 30 3004 20 40 400 The table contains data for a hypothetical single-product economy. Real GDP in year 3 is
  • $623
  • $450
  • $380
  • $150
The following are national income account data for a hypothetical economy in billions of dollars: gross private domestic investment ($320), imports ($35), exports ($22), personal consumption expenditures ($2,460), and government purchases ($470). What is GDP in this economy?
  • $70,000
  • $402 (add all income)
  • consumption
  • $3,237 billion
Which of the following is a private transfer payment?
  • when gross investment exceeds replacement investment
  • Spending on meals by consumers at restaurants
  • the child-care services provided by a stay at home parent.
  • a check for $250 sent by parents to a daughter at college
National income accountants can avoid multiple counting by
  • GDP would be overstated.
  • only calculating final goods.
  • any increase in business inventories
  • consumption
Which of the following do national income accountants consider to be investment?
  • the GDP excludes intermediate transactions
  • The purchase of a new house.
  • any increase in business inventories
  • a check for $250 sent by parents to a daughter at college
Which of the following is a final good or service?
  • A haircut purchased by a father for his son.
  • a check for $250 sent by parents to a daughter at college
  • the child-care services provided by a stay at home parent.
  • Spending on meals by consumers at restaurants
Personal Consumption Expenditures $400Government Purchases 128Gross Private Domestic Investment 88Net Exports 7Net Foreign Factor Income 0Consumption of Fixed Capital 43Taxes on Production and Imports 50Compensation of Employees 369Rents 12Interest 15Proprietors' Income 52Corporate Income Taxes 36Dividends 24Undistributed Corporate Profits 22Statistical Discrepancy 0 Refer to the accompanying national income data for the economy. All figures are in billions of dollars. The gross domestic product for this economy is
  • $402 (add all income)
  • $150
  • $5
  • $623
Nominal GDP is
  • excluded when calculating GDP because they do not reflect current production.
  • monetary value of all final goods and services produced within the borders of a ntion in a particular year.
  • the sum of all monetary transactions involving final goods and services that occur in the economic year.
  • the production of 1933's GDP used up more capital goods than were produced in that year.
Suppose nominal GDP was $360 billion in 1990 and $450 billion inThe appropriate price index (1985 = 100) was 120 in 1990 and 125 inBetween 1990 and 2000, real GDP
  • increase by $60 billion
  • subtract $10 billion from other elements of investment in calculating total investment
  • increased by 65 billion.
  • net investment is negative.
Suppose the total monetary value of all final goods and services produced in a particular country in 2015 is $500 billion and the total monetary value of final goods and services sold is $450 billion. We can conclude that
  • net investment is negative.
  • $116. NDP = GDP- Depreciation
  • The purchase of a new house.
  • GDP in 2015 is $500 billion.
The total volume of business sales in our economy is several times larger than GDP because
  • Spending on meals by consumers at restaurants
  • automobiles for personal use but not houses.
  • the child-care services provided by a stay at home parent.
  • the GDP excludes intermediate transactions
Which of the following is not economic investment?
  • The purchase of a new house.
  • Peter buys a newly constructed house.
  • a check for $250 sent by parents to a daughter at college
  • The purchase of 100 shares of AT&T by a retired business executive.
Year Units of Output Price Per Unit1 3 $32 4 43 6 54 7 75 8 8 Assume an economy that makes only one product and that year 3 is the base year. Output and price data for a five-year period are shown in the table. The price index for year 1 is
  • 60
  • 175
  • some year before 2000
  • $150
Refer to the diagram. Which of the following statements is correct?
  • the child-care services provided by a stay at home parent.
  • Nominal GDP must be deflated in each year since 2000 to determine real GDP
  • Peter buys a newly constructed house.
  • The purchase of 100 shares of AT&T by a retired business executive.
The smallest component of aggregate spending in the United States is
  • Peter buys a newly constructed house.
  • net exports
  • net investment is negative.
  • Nominal GDP must be deflated in each year since 2000 to determine real GDP
The largest component of total expenditures in the United States is
  • GDP would be overstated.
  • only calculating final goods.
  • consumption
  • not counted.
Which of the following activities is excluded from GDP, causing GDP to understate a nation's well-being?
  • Nominal GDP must be deflated in each year since 2000 to determine real GDP
  • consumer durable goods, consumer nondurbale goods and services.
  • when gross investment exceeds replacement investment
  • the child-care services provided by a stay at home parent.
An economy is enlarging its stock of capital goods
  • the economy's stock of capital is shrinking.
  • when gross investment exceeds replacement investment
  • Peter buys a newly constructed house.
  • We need more information to determine whether GDP has changed.
The largest component of national income is
  • Compensation of employees
  • The purchase of a new house.
  • decreasae by $12 billion
  • GDP would be overstated.
Transfer payments are
  • We need more information to determine whether GDP has changed.
  • current output at base year prices
  • excluded when calculating GDP because they do not reflect current production.
  • The purchase of 100 shares of AT&T by a retired business executive.
Personal Taxes $40Social Security Contributions 15Taxes on Production and Imports 20Corporate Income Taxes 40Transfer Payments 22U.S. Exports 24Undistributed Corporate Profits 35Government Purchases 90Gross Private Domestic Investment 75U.S. Imports 22Personal Consumption Expenditures 250Consumption of Fixed Capital 25Net Foreign Factor Income 10Statistical Discrepancy 0GDP is
  • $623
  • $417 (gov purchases + gross private investments+ imports+ exports+ personal consumption expenditures)
  • $121 (add everything but consumption of fixed capital and subtract imports-exports)
  • the sum of all monetary transactions involving final goods and services that occur in the economic year.
If nominal GDP in some year is $280 and real GDP is $160, then the GDP price index for that year is
  • 300
  • 44%
  • G.
  • 175
If depreciation exceeds gross investment,
  • when gross investment exceeds replacement investment
  • the GDP excludes intermediate transactions
  • net investment is negative.
  • the economy's stock of capital is shrinking.
Real GDP refers to
  • current output at base year prices
  • the difference between the value of a firm's output and the value of the inputs it has purchased from others.
  • the sum of all monetary transactions involving final goods and services that occur in the economic year.
  • GDP data that have been adjusted for changes in the price level.
If intermediate goods and services were included in GDP,
  • Compensation of employees
  • only calculating final goods.
  • GDP would be overstated.
  • increased by 65 billion.
Government Purchases $15Consumption 90Gross Investment 20Consumption of Fixed Capital 5Exports 8Imports 12Refer to the accompanying data (all figures in billions of dollars). GDP is
  • $116. NDP = GDP- Depreciation
  • the production of 1933's GDP used up more capital goods than were produced in that year.
  • subtract $10 billion from other elements of investment in calculating total investment
  • $121 (add everything but consumption of fixed capital and subtract imports-exports)
In 1933, net private domestic investment was a minus $6.0 billion. This means that
  • consumer durable goods, consumer nondurbale goods and services.
  • productive but is excluded from GDP because no market transaction occurs.
  • the production of 1933's GDP used up more capital goods than were produced in that year.
  • The purchase of 100 shares of AT&T by a retired business executive.
When local police and fire departments buy new cars for their operations, these are counted as part of
  • not counted.
  • the GDP excludes intermediate transactions
  • G.
  • consumer durable goods, consumer nondurbale goods and services.
Personal Taxes $40Social Security Contributions 15Taxes on Production and Imports 20Corporate Income Taxes 40Transfer Payments 22U.S. Exports 24Undistributed Corporate Profits 35Government Purchases 90Gross Private Domestic Investment 75U.S. Imports 22Personal Consumption Expenditures 250Consumption of Fixed Capital 25Net Foreign Factor Income 10Statistical Discrepancy 0 Refer to the accompanying data (all figures in billions of dollars). NI is
  • only calculating final goods.
  • $402 (add all income)
  • $3,237 billion
  • any increase in business inventories
Suppose nominal GDP in 2009 was $100 billion and in 2010 it was $260 billion. The general price index in 2009 was 100 and in 2010 it wasBetween 2009 and 2010, the real GDP rose by approximately
  • GDP in 2015 is $500 billion.
  • $450
  • 44%
  • increase by $60 billion
In an economy, the value of inventories was $75 billion in 2016 and $63 billion inIn calculating total investment for 2017, national income accountants would
  • Compensation of employees
  • $116. NDP = GDP- Depreciation
  • net investment is negative.
  • decreasae by $12 billion
If depreciation (consumption of fixed capital) exceeds gross domestic investment, we can conclude that
  • increased by 65 billion.
  • GDP would be overstated.
  • net investment is negative.
  • the economy's stock of capital is shrinking.
If real GDP in a particular year is $80 billion and nominal GDP is $240 billion, the GDP price index for that year is
  • 300
  • 100
  • 60
  • 175
National income accountants define investment to include
  • when gross investment exceeds replacement investment
  • only calculating final goods.
  • any increase in business inventories
  • GDP would be overstated.
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