ECON 201 Chapter 7 HW
A designer company buys $400 of silk, $30 of accessories, and adds $200 of value. According to the value-added approach, the price of the dress should be
$630
Which of the following transactions is included in the nation's gross domestic product?
A college student buys a pizza and has it delivered to her dorm room.
The equation that breaks GDP down by the four sources of aggregate spending is
GDP = C + I + G + X - IM
The circular flow-diagram illustrates all of the following in the US economy EXCEPT -flows of $ -growing income inequality -the purchase and sale of factors of production -flows of goods and services
Growing income inequality
A country's exports minus imports during a period are
gross exports
The dollar value of final goods and services only is counted in GDP because
if we counted the value of all goods, we would count inputs, like the value of steel in a new automobile, more than once.
A country's GNP
is the total factor income earned by residents of a country
An example of a government transfer is
a Social Security payment (government to household)
According to the circular-flow model, if there is an increase in government spending, what is likely to happen?
an increase in the nominal GDP
Economists frequently use GDP per capita to reflect
differences in living standards across countries
The total income of households after taxes and government transfers is called
disposable income
Goods that are produced in a particular period but NOT sold in that period
end up in inventory and are included in investment
Investment spending is spending on
productive physical capital