ECON 2010 Chapter 5
The value of capital used up in the production of goods and services is called ____
depreciation
An example of unreported income is_____.
lawn care that is paid "off the books"
At present, government spending on goods and services claims roughly ______ of total U.S. output
1/5 or 20%
Investment currently claims about _____ of U.S. output.
1/6
An intermediate good is:
a good used in the production of final products
The distinction of imports from domestic made goods is ___ to establish
difficult
Measuring the many things that give us pleasure, such as beautiful sunsets and loving parents, is:
difficult to measure because they are intangible
The amount of income that households have left over after paying their personal taxes is :
disposable income
GDP accounts have two sides. One side focuses on the demand side (called the ___ approach) and the other side focuses on the supply side (called the ___ approach)
expenditure, income
___ goods are included in the calculation of GDP, while ___ goods are not included
final; intermediate
Which of the following is equal to net investment?
gross investment minus depreciation
Goods and services purchase from international sources are:
imports
Nominal GDP measures the value of all goods and services:
in current prices
Which of the following is subtracted from national income to arrive at person income?
indirect business taxes, corporate profits
An increase in the average level of prices of goods and services is:
inflation
Nominal GDP is not an accurate measure of the real level of economic activity in a country because:
inflation distorts the real value of all goods and services produced
Goods and services that are purchased for resale or for further processing or manufacturing are called____ goods.
intermediate
The chain-weighted price indexes employed by the US Department of Commerce to compute real GDP use a ___ average of price levels in consecutive years as an inflation adjustment.
moving
Investment goods consist of _____.
newly produced plants, machinery, and equipment
Computing GDP using current prices gives us ____.
nominal GDP
Suppose the physical output produced by an economy falls, yet higher prices give rise to an increase in measured GDP. Un this case we can say that ___ GDP is higher and ___ GDP is lower.
nominal; real
Which of the following two items are added to national income to arrive at personal income?
transfer payments and capital income
Calculating national income helps us understand For whole our output was produced
true
True or False: All final purchases of plant, machinery, and equipment in a given time period are included as gross investment
true
The GDP identifies the mix of output a country has selected, which also answers the question of ___ to produce.
what
Net investment is:
what is left over from total new private investment after depreciation
Consumption goods and services purchased by their end consumers are called ____ goods
Final
Society's answer to the core issue of WHAT to produce is answered by ______
GDP
Net domestic product is____
GDP - depreciation
Per capita GDP is:
GDP / population
GDP per capita means:
GDP per person
The output of the German-owned BMW plant in South Carolina is included in Germany's ___ and in the United States' ___.
GNP; GDP
The market value of all final goods and services produced within the borders of a given country during a given period of time is the definition of ____.
Gross domestic product
If GDP included unreported income, GDP would:
Increase
Gross domestic product less depreciation equals ___
Net domestic product
____ serves as a measure of value for calculating total output of a product.
Price
Gross___ product refers to output produced by American-owned factors of production regardless of where they're located.
Simon Kuznets
The flow of income illustrates that:
The dollar value of output will always equal the dollar value of income
National Income Accounting is:
The measurement of aggregate economic activity, particularly national income and its components
True or False: Prices serve as a measure of value for calculating total output.
True
Depreciation is ____
the wearing out of plant and equipment
When describing the flow of income, GDP returns to the market in the form of which of the following?
consumption, government spending, investment
Government ___ include all federal, state, and local government outlays on final goods and services.
purchases
Foreign goods purchased by American consumers, firms, or governments should be ___ GDP because the goods were produced outside the United States
subtracted from
The view of GDP as the sum of Monet spent on purchases is called:
the expenditure approach
Gross investment is ____.
the total amount of investment purchases in a given time period