Econ Chapter 2 (Part 1)

Assume that apples cost $0.50 in 2002 and $1 in 2009, whereas oranges cost $1 in 2002 and $1.50 in 2009. If 4 apples were produced in 2002 and 5 in 2009, whereas 3 oranges were produced in 2002 and 4 in 2009, then real GDP (in 2002 prices) in 2009 was:

$6.50

In 2013 in the United States, total government purchases per person (in current dollars) amounted to approximately:

$9,900.

If GDP (measured in billions of current dollars) is $5,465, consumption is $3,657, investment is $741, and government purchases are $1,098, then net exports are:

-$31.

All of the following transactions that took place in 2009 would be included in GDP for 2009 except the purchase of a:

2001 Jeep Cherokee.

Assume that a firm buys all the parts that it puts into an automobile for $10,000, pays its workers $10,000 to fabricate the automobile, and sells the automobile for $22,000. In this case, the value added by the automobile company is:

$12,000.

A farmer grows wheat and sells it to a miller for $1; the miller turns the wheat into flour and sells it to a baker for $3; the baker uses the flour to make bread and sells the bread for $6. The value added by the miller is:

$2.

Assume that a rancher sells McDonald's a quarter-pound of meat for $1 and that McDonald's sells you a hamburger made from that meat for $2. In this case, the value included in GDP should be:

$2.

Assume that a tire company sells 4 tires to an automobile company for $400, another company sells a compact disc player for $500, and the automobile company puts all of these items in or on a car that it sells for $20,000. In this case, the amount from these transactions that should be counted in GDP is:

$20,000.

The largest component of national income is:

compensation of employees.

According to the definition used by the U.S. Bureau of Labor Statistics, people are considered to be unemployed if they:

do not have a job, but have looked for work in the past 4 weeks.

The total income of everyone in the economy is exactly equal to the total:

expenditure on the economy's output of goods and services.

All of the following are measures of GDP except the total:

expenditures of all businesses in the economy.

To avoid double counting in the computation of GDP, only the value of ______ goods are included.

final

An estimate of the number of unemployed workers in the economy can be obtained from:

from the household survey, but not from the establishment survey.

All of the following are a stock except:

he government budget deficit.

An example of an imputed value in the GDP is the:

housing services enjoyed by homeowners.

A fixed-weight price index like the CPI ______ the change in the cost of living because it ______ take into account that people can substitute less expensive goods for ones that have become more expensive.

overestimates; does not

The investment component of GDP includes all of the following except:

purchases of corporate stock.

The best measure of the economic satisfaction of the members of a society is:

real GDP.

In principle, the GDP accounts should—but do not—have an imputation for:

rental services of automobiles driven by owners.

The amount of capital in an economy is a ______ and the amount of investment is a ______.

stock; flow

Since GDP includes only the additions to income, not transfers of assets, ______ are not included in the computation of GDP.

used goods

Assume that apples cost $0.50 in 2002 and $1 in 2009, whereas oranges cost $1 in 2002 and $0.50 in 2009. If 10 apples and 5 oranges were purchased in 2002, and 5 apples and 10 oranges were purchased in 2009, the CPI for 2009, using 2002 as the base year, is:

1.25

The statistic used by economists to measure the value of economic output is:

GDP.

A worker with two jobs is counted:

once in the household survey, but twice in the establishment survey.

The national income accounts identity, for an open economy, is:

Y = C + I + G + NX.

Chain-weighted measures of real GDP make use of prices from:

a continuously changing base year.

Assume that the market basket of goods and services purchased in 2004 by the average family in the United States costs $14,000 in 2004 prices, whereas the same basket costs $21,000 in 2009 prices. However, the basket of goods and services actually purchased by the average family in 2009 costs $20,000 in 2009 prices, whereas this same basket would have cost $15,000 in 2004 prices. Given these data, a Paasche index for 2009 using 2004 prices would be:

approximately 1.07.

An estimate of total employment in the economy can be obtained from:

both the household and establishment surveys.

Disposable personal income:

is computed by subtracting personal tax from personal income.

According to the definition used by the U.S. Bureau of Labor Statistics, a person is not in the labor force if that person:

is going to school full time.

When a firm sells a product out of inventory, GDP:

is not changed

A woman marries her butler. Before they were married, she paid him $60,000 per year. He continues to wait on her as before (but as a husband rather than as a wage earner). She earns $1,000,000 per year both before and after her marriage. If GDP were changed so that it truly measured the sum of all final economic activity, the marriage would:

leave GDP unchanged

Real GDP is a better measure of economic well-being than nominal GDP, because real GDP:

measures changes in the quantity of goods and services produced by holding prices constant.

The new chain-weighted measures of real GDP are an improvement over traditional measures because the prices used to compute real GDP are:

never far out of date.