Econ HW 5
Transfer payments are subtracted from national income to get to personal income. true false
false
During a business cycle expansion, total production ________ and total employment ________. A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases
a
Refer to Table above. Suppose that a simple economy produces only four goods and services: shoes, DVDs, tomatoes, and ketchup. Assume one half of the tomatoes are used in making the ketchup and the other half of the tomatoes are purchased by households. Using the information in the above table, nominal GDP for this simple economy equals A) $7,400. B) $6,400. C) $5,800. D) 2,440 units.
a
Which of the following are not considered part of government purchases? A) welfare benefits B) teachers' salaries paid by a local government C) a tank purchased by the federal government D) a bridge purchased by the state government
a
Gross domestic product in the economy is measured by the A) total number of goods and services produced in the economy. B) dollar value of all final goods and services produced in the economy. C) total number of goods produced in the economy. D) total number of services produced in the economy.
b
Refer to Table above. 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 A) 2013. B) 2014. C) 2015. D) 2016.
b
Suppose that nominal GDP in 2016 was less than real GDP in 2016. Given this information, we know for certain that A) the price level in 2016 was greater than the price level in the base year. B) the price level in 2016 was less than the price level in the base year. C) real GDP in 2016 was less than real GDP in the base year. D) real GDP in 2016 was greater than real GDP in the base year.
b
The output of Mexican citizens who work in Texas would be included in the A) gross domestic product of Mexico. B) gross national product of Mexico. C) gross national product of the United States. D) net national product of the United States.
b
If nominal GDP is $5 trillion and real GDP is $4 trillion, the GDP deflator is A) 12.5. B) 80. C) 125. D) 800.
c
Real GDP is GDP in a given year A) adjusted only for anticipated inflation. B) adjusted only for unanticipated inflation. C) valued in the prices of that year. D) valued in the prices of the base year.
c
Refer to Table above. What is the GDP deflator in 2016 if 2016 is the base year? A) 120 B) 118 C) 100 D) 87
c
Which of the following is not directly counted in GDP? A) investment expenditures B) government purchases C) intermediate goods D) consumer goods
c
Gross domestic product understates the total production of final goods and services because of the omission of A) exports. B) inflation. C) intermediate goods. D) household production.
d
If the GDP deflator rises from 185 to 190, what is the rate of inflation between the two years? A) 270% B) 50% C) 5% D) 2.7%
d
Investment, as defined by economists, would include the purchase of a A) corporate bond. B) government bond. C) share of stock in ExxonMobil. D) computer by an accounting firm.
d
The nominal GDP of the U.S. in 2015 was approximately $17.3 trillion. This means that A) the value of output in 2015 was around $17.3 trillion. B) total income in 2015 was around $17.3 trillion. C) total spending in 2015 was around $17.3 trillion. D) all of the above are true.
d
The purchase by a foreign government of an airplane produced in the United States is included in U.S. A) consumption expenditures. B) investment expenditures. C) government purchases. D) net exports.
d
If nominal GDP is less than real GDP, then the GDP deflator will be greater than 100. true false
false
Residential investment includes spending by firms on office buildings. true false
false
Developing countries with large informal sectors tend to have firms that invest less in capital equipment. true false
true