Macro Homework 5

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

household production

Product Quantity Price Shoes 40 $60.00 DVDs 100 18.00 Tomatoes 2,000 1.00 Ketchup 300 4.00 What is the nominal GDP?

$7,400

The nominal GDP of the U.S. in 2015 was approximately $17.3 trillion. This means that

-the value of output in 2015 was around $17.3 trillion -total income in 2015 was around $17.3 trillion -total spending in 2015 was around $17.3 trillion

Which of the following are not considered part of government purchases?

Welfare Benefits

Investment, as defined by economists, would include the purchase of a

computer by an accounting firm

Gross Domestic Product in the economy is measured by the

dollar value of all final goods and services produced in the economy

During a business cycle expansion, total production ________ and total employment ________.

increases, increases

Which of the following is not directly counted in GDP?

intermediate goods

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

net exports