Econ Quiz 12

Suppose, in 2012, you purchased a house built in 2003. Which of the following would be included in the gross domestic product for 2012?

the value of the real estate agent

Depreciation is

the value of worn-out equipment, machinery, and buildings

If prices rise on average in the U.S. economy, the purchasing power of the dollar declines

tru

Real GDP is GDP in a given year

valued in the prices of the base year

Which of the following could cause nominal GDP to decrease, but real GDP to increase?

The price level rises and the quantity of final goods and services produced falls.

Increases in real GDP would understate the well-being of a country over time if, over that time period, the

amount of pollution decreased

The GDP deflator is a measure of the

average level of prices of final goods and services in the economy

Investment, as defined by economists, would not include which of the following? Ford

buys U.S. government bonds

Which of the following is not a durable good?

clothing

National income equals gross national product minus

depreciation

The best measure of the income households actually have available to spend is

disposable personal income

Real GDP per capita is calculated by dividing the value of real GDP for a country by the country's adult population

false

Transfer payments are subtracted from national income to get personal income

false

The output of U.S. citizens who work in Canada would be included in the

gross domestic product of Canada

The size of the underground economy would tend to increase if the government of a country

increased income rate taxes

Which of the following is not directly counted in GDP?

intermediate goods

The purchase of a new house is included in

investment expenditures

The Philippines and Vietnam have roughly the same size population. Suppose the GDP of the Philippines is $1,000 billion and the GDP of Vietnam is $10,000 billion. You should conclude

it is not possible to make a good comparison of the economic well being of a typical individual in the 2 countries without additional information.

In 2010, which component of GDP had a negative value?

net exports

The purchase by a foreign government of an airplane produced in the United States is included in U.S.

net exports

The GDP deflator is the

ratio of nominal GDP to real GDP multiplied by 100

Which of the following is not true about the consumption of GDP in 2010?

the majority of consumer spending is on durable goods

Gross domestic product is calculated by summing up

the total market value of final goods and services produced in the economy during a period of time

Gross domestic product understates the total production of final goods and services because of the omission of

the underground economy

In calculating gross domestic product, 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, multiplies them by the quantity produced, and then adds them up.