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Production-based accounting is used to estimate GDP by​ ____________.

1.summing each​ firm's value added to the production process. 2. computing for each firm the difference between sales revenue and the purchase of intermediate​ products, then summing this difference across all firms.

Why is it essential to differentiate between real and nominal growth rates of​ GDP?

B. The nominal growth rate combines the effect of price changes along with changes in the production of goods and services and thus gives a less clear indication of the impact on living standards. C. It is the real growth rate that is meaningful since it indicates the change in the production of goods and​ services, a very significant source of improved living standards.

What accounts for majority of GDP?

C consumption

Which of the following are not included in GDP but probably should​ be? ​(Check all that apply​.) A. Transactions in the underground economy. B. Financial asset transactions. C. Home production. D. The value of intermediate goods used in the assembly of final products.

C,A

What is the key difference between the Consumer Price Index​ (CPI) and the GDP​ deflator?

Compares different baskets

GDP is estimated using​ expenditure-based accounting by using the equation​ ____________.

GDP = C + I + G + X - M

A firm's value added refers to the dollar value of​ ____________

a​ firm's sales revenue minus the​ firm's purchases of intermediate products from other firms.

Suppose the production of foreign​-owned factors operating in the United States exceeds the production of U.S.​-owned factors operating abroad. For the United​ States, ____________.

gross domestic product left parenthesis GDP right parenthesis is larger than gross national product left parenthesis GNP right parenthesis.

Which one of the sets of terms given below would correctly complete the following definition of​ GDP? "Gross Domestic Product is the​ ____ value of the​ ____ goods and services produced​ _____ of a country during a particular period of​ time."

market, final, within borders

The GDP deflator is calculated using​ ____________.

nom/real * 100

The market value of the production generated by the factors of production possessed or owned by a nation's residents is​ ____________

GNP

hen base year prices are used to determine the value of each unit that is produced in an​ economy, the resulting aggregate is known as​ ____________.

Real GDO

If the level of aggregate expenditure was​ $16.8 trillion in​ 2013, the level of aggregate income in the economy during 2013 was​ ___________.

also​ $16.8 trillion because of the identity between aggregate expenditure and income.