Get ahead with a $300 test prep scholarship
| Enter to win by Tuesday 9/24
Macroeconomics, Chapter 8, GDP
Terms in this set (67)
During a business cycle expansion, total production ____ and total employment ____.
In calculation gross domestic product, the Bureau of Economic Analysis uses the sum of the market value of final goods and services produced. This means the BEA
values goods and services at their market prices, multiplies them by the quantity produced, and then adds them up.
Suppose in 2016, you purchase a house built in 2003. Which of the following would be included in the gross domestic product for 2016?
the value of the services of the real estate agent.
Which of the following goods is directly counted in GDP?
a 12-inch Subway sandwich purchased by a student.
An example of an intermediate good would be
the rims on a new car.
Which of the following transactions represents the purchase of a financial good?
Your father buys a new John Deere riding lawn mower.
Which of the following is NOT directly counted in GDP?
Refer to Table 8-1. Suppose that a simple economy produces only four goods and services: sweatshirts, dental examinations, coffee drinks, and coffee beans. Assume all of the coffee beans are used in the production of the coffee drinks. Using the information in the above table, nominal GDP for this simple economy equals
In the circular flow model, the value of total income for an economy ____ the value of total production.
The nominal GDP of the U.S. in 2015 was approximately $17.3 trillion. This means that
all of the above are true
The purchase of the new automobile is included in
consumption expenditures on durable goods.
Investment, as defined by economists, would include the purchase of a
computer by an accounting firm.
To calculate GDP by the expenditure method, one must add
consumption spending, investment spending, government spending, and net exports.
The purchase of a new house is included in
The purchase by a household in China of a CD produced in the United States is included in U.S.
What is the largest component of spending in the United States?
In the United States in 2013, the Bureau of Economic Analysis begins counting spending on research and development as ____ which counts as part of a GDP.
Refer to Table 8-3. Consider the data above (in billions of dollars) for an economy; Gross domestic product (in billions of dollars) for this economy equals
Refer to Table 8-4. Consider the data above (in billions of dollars) for an economy: Gross domestic product (in billions of dollars) for this economy equals
The sum of the value added to every firm involved in producing all final goods and services ____ gross domestic product.
Refer to Table 8-5. The value added by the automobile dealer equals
Refer to Table 8-5. The value of each automobile in gross domestic product equals
A transfer payment is a payment by the government to an individual
for which the government does not receive a good or service in return.
An example of transfer payment is
a welfare payment.
Consumption expenditures do NOT include household purchases of
The largest component of spending in GDP is
Which of the following would result in GDP for an economy equal to $10 trillion?
C= $5 trillion
I= $5 trillion
G= $2 trillion
NX= $2 trillion
Total income in an economy is equal to
the sum of wages, interest, rent, and profit.
Gross domestic product understates the total production of final goods and services because of the omission of
Legalizing all forms of illegal activities
increases GDP and reduces the size of the underground economy.
Increases in real GDP would overstate the increase in the well-being of a country over time if, over that time period, the
average hours worked per week increased.
Presently, GDP is ____ to compensate for the costs of environmental damage.
Which of the following is counted in GDP?
the cost of a speed boat purchased by drug smugglers
Nominal GDP is GDP in a given year
valued in the prices of that year.
Real GDP is GDP in the given year
valued in the prices of the base year.
Refer to Table 8-11. Real GDP for Tyrovia for 2016 using 2017 as the base year equals
Refer to Table 8-11. Nominal GDP for Tyrovia in 2016 equals
Refer to Table 8-12. Consider the following data on nominal GDP and real GDP (values are in billions of dollars): The base year used in calculating real GDP is
If the quality of goods and services produced in the economy DECREASES
it may be possible for nominal GDP to increase.
Suppose that nominal GDP in 2016 was less than real GDP in 2016. Given this information, we know for certain that
the price level in 2016 was less than the price level in the base year.
To examine how the total production of an economy has changed over time, it would be better to examine
The GDP deflator is the
ratio of nominal GDP to real GDP multiplied by 100.
The GDP deflator is a measure of the
average levels of prices of final goods and services in the economy.
If nominal GDP is $5 trillion and real GDP is $4 trillion, the GDP deflator is
Refer to Table 8-16. Given the information above, what can we say has happened in the economy from 2015 to 2016?
The price level has risen.
If the GDP deflator rises from 185 to 190, what is the rate of inflation between the two years?
An inflation rate of 5% between 2015 and 2016 would be implied by a change in the GDP deflator from ____ in 2015 to ____ in 2016.
Refer to Table 8-20. Given the following information, calculate the rate of increase in the price level from 2015 to 2016.
Gross national product, GNP, of the United States is the market value of the final goods and services
produced by citizens of the United States anywhere in the world.
The output of Mexican citizens who work in Texas would be included in the
gross national product of Mexico.
Which of the following is included in both the U.S. GDP and U.S. GNP?
the value of all cars produced by General Motors in the United States.
the value of worn-out equipment, machinery, and buildings.
National income equals gross national product minus
The best measure of the income households actually have available to spend is
disposable personal income.
Personal income is defined as
national income less retained earnings plus transfer payments and plus interest of government bonds.
Disposable personal income equals personal income
minus personal tax payments.
If a U.S. firm produces cars in Mexico, that production should count towards
If a German firm produces cars in the United States, that production should count towards
Refer to Table 8-30. Based on the table above, what is personal income for this economy?
Question 36 & 37
Question 21 & 22