Macro Homework 6
Suppose in 2018, you purchase a house built in 2003. Which of the following would be included in the GDP for 2018?
The value of the services of the real estate agent
In calculating GDP, the Bureau of Economic Analysis uses the sum of the market value of final goods and services produced. This means that the BEA
Values goods and services at their market prices, multiples them by the quantity produced, and then adds them up.
Nominal GDP is GDP in a given year
valued in the prices of that year
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
$1200
Refer to table 8-5 The value of each automobile in gross domestic product equals
$25000
Refer to table 8-11 Real GDP for Tyrovia for 2018 using 2009 as the base year equals
$690
Refer to Table 8-5. The value added by the automobile dealer equals
$7000
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
$8750
The GDP deflator in year 2 is 105, using year 1 as the base year. This means that, on average, the cost of goods and services is
5% higher in year 2 than in year 1
Which of the following goods is directly counted in GDP?
A 12in subway sandwich purchased by a student
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
Which of the following transactions would take place in the underground economy
John makes chain link belts and necklaces and sells them at a local flea market for cash to avoid paying taxes
Which of the following is likely to increase measured GDP?
Marijuana becomes legal to grow and sell
An example of business fixed investment spending is
NOT $200 million of unsold cars at a car dealership
Refer to table 8-11 Nominal GDP for Tyrovia in 2018 equals
NOT $690
Refer to table 8-14 Consider the following data on nominal GDP and real GDP: The GDP deflator for 2018 equals
NOT 102.6
Refer to table 8-12 Consider the following data on nominal GDP and real GDP: The base year used in calculating real GDP is
NOT 2015
Macroeconomic, as opposed to microeconomics, includes the study of what determines the
NOT quantity of Dell employees
Household production refers to
NOT the manufacturing of durable household products
Which of the following could cause nominal GDP to decrease next year, but real GDP to increase?
NOT the price level rises and the quantity of final goods and services produced falls.
Which of the following is not an example of a transfer payment?
NOT unemployment insurance payments
The factors of production include
capital
Which of the following is not a durable good?
clothing
To calculate GDP by the expenditure method one must add
consumption spending, investment spending, government purchases, and net exports
In the circular flow model, the value of total income for an economy ___________ the value of total production
equals
If nominal GDP exceeds real GDP for a specific year, then GDP deflator must be
greater than 100
Gross domestic product understates the total production of final goods and services because of the omission of
household production
A sharp increase in the number of medical errors increases the number of lawyers hired to determine medical malpractice settlements. This will
increase GDP and decrease well-being in the economy
Legalizing all forms of illegal activities
increases GDP and reduces the size of the underground economy.
Which of the following is not directly counted in GDP?
intermediate goods
The purchase of a new house is included in
investment expenditures
In an underground economy the production of goods and services
is not measured or included in GDP
If the quantity of goods and services produced in the economy decreases
it may be possible for nominal GDP to increase
in 2016 which component of GDP had a negative value?
net exports
To examine how the total production of an economy has changed over time, it would be better to examine
real GDP
Which of the following is counted in GDP?
the cost of a speed boat purchased by drug smugglers
If prices in the economy rise, then
the purchasing power of the dollar declines
Total income in an economy is equal to
the sum of the wages, interest, rent, and profit
Real GDP is GDP in a given year
valued in the prices of the base year