Econ 8.4
In the U.S., gross domestic product (GDPLOADING...) and gross national product (GNPLOADING...) are close in value. Under what circumstances would GNP be much larger than GDP?
All of the above
When a significant fraction of domestic production takes place in foreign-owned facilities, a country's difference between GDP and GNP is as follows
GDP will be much larger than GNP
U.S. Gross National Product (GNP) differs from U.S. Gross Domestic Product (GDP) in which of the following ways?
Gnp is the value of final goods and services produced by residents of the US; GNP considers production that occurs outsides the US
The table and figure show GDP measured in terms of the total income received by households. Use the table and figure to help determine which of the following statements about the division of income is false.
Gross domestic income is measured precisely
Suppose the amount the federal government collects in personal income taxes increases, while the level of GDP remains the same. What will happen to the values of national income, personal income, and disposable personalincome?
NI will remain the same PI will remain the same DPI will decrease.
the largest component of gross domestic income is
Wages
Disposable personal income is equal to
personal income minus personal tax payments
Why are the values that the BEA reports for GDP and GDI almost always different? The reasons that GDP and GDI differ are
the BEA uses different data sets to measure GDP and GDI; Errors in the income data used to measure GDI can differ from the errors in the production and spending data used to measure GDP
An article on bloomberg.com observes that "GDP and GDI are both estimates of the size of the economy. . . . They should in theory add up to the same amount, but they apparently never do, even after multiple rounds of revisions." Source: Justin Fox, "Don't Believe That GDP Number. Or Any Other Number," bloomberg.com, August 30, 2018. a. Why in theory should GDP and GDI have the same value? In theory, GDP and GDI should be the same because
the total value of what's spent on goods and services ultimately becomes income to households.
A publication of the Central Bank of Ireland states that "GDP overstates the size and growth rate of the Irish economy." Source: Central Bank of Ireland, "Irish Economy: Outlook 2018-2019," September 24, 2018. Briefly explain the bank's reasoning.
A significant portion of production in Ireland is by foreign-owned firms, which makes GDP overstate the size and growth rate of the Irish economy.
Based on the table and graph, which of the following statements regarding total production and total income is true?
Each measure of production and income gives a different value (even if only slightly) for total production and income.
What is the difference between gross domestic product (GDP) and gross domestic income (GDI)?
GDP focuses on measuring the economy's output from the production side, mainly relying on spending data, whereas GDI measures output from the income side.
Suppose the amount the federal government collects in personal income taxes decreases, while the level of GDP remains the same. What will happen to the values of national income, personal income, and disposable personalincome?
National income will:remain the same personal income will: remain the same Disposable income will: increase
In the United States, the difference between GNP and GDP is____ that of many other countries.
Smaller than
To calculate personal income from national income which of the following must the BEA do?
add govt transfer payments
which of the following do we subtract from GDP to obtain national income?
depreciation
If you were attempting to forecast the level of consumer spending by households, which measure of total production or total income might be most helpful in making your forecast?
disposable personal income