8.4: Other Measures of Total Production and Total Income
In the U.S., gross domestic product (GDP) and gross national product (GNP) are close in value. Under what circumstances would GNP be much larger than GDP? Many U.S. citizens currently work in foreign countries while few foreign citizens currently work in the U.S. Few foreign citizens currently work in the U.S. and few foreign firms maintain facilities in the U.S. Few foreign firms maintain facilities in the U.S. while many U.S. firms are currently operating abroad. All of the above would push GNP above GDP.
All of the above would push GNP above GDP.
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
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? In the United States, the difference between GNP and GDP is _________ that of many other countries.
GNP is the value of final goods and services produced by residents of the U.S GNP considers production that occurs outside the U.S. smaller than
All of the following are correct except
Gross domestic income does not include health insurance benefits received by the employees.
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. A. Gross domestic income is measured precisely. B. Profits include the profits of sole proprietorships and profits of corporations. C. The largest component of income received by households is wages. D. Wages are slightly more than three times as large as the profits received by sole proprietors and the profits received by corporations combined.
Gross domestic income is measured precisely.
Disposable personal income is equal to
personal income minus personal tax payments.
In 2016, the largest component of gross domestic income was
wages
Which component of gross domestic income is the largest?
wages
Indicate whether the following statement is correct or incorrect. "Corporate profits are much too high: Most corporations make profits equal to 50 percent of the price of the products they sell."
Incorrect: The largest component of gross domestic income is wages, which are about three times as large as profit.
Ireland is one of the few countries where GDP and GNP differ dramatically. Using GDP per person, Ireland has the third highest income per person in Europe. An article on the Financial Times website states that: "With GDP being about 20 percent larger than GNP, Irish people appear (when using GDP per person) to be richer than what they feel they are." Source: Valentina Romei, "Ireland Is the Wealthiest Economy in Europe...or Not," ft.com, May 13, 2015. Briefly explain the author's reasoning.
A significant portion of production in Ireland is by foreign-owned firms, which makes the Irish people appear to be richer than they feel they are.
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 for total production and income
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 personal income? ---- 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 personal income?
National income will remain the same Personal income will remain the same Disposable personal income will increase ---------------- National income will remain the same Personal income will remain the same Disposable personal income will decrease
Consider the following table: National income (NI) equals $____ billion Personal income (PI) equals $____ billion Disposable personal income (DPI) $ _____ billion
National income (NI)=Net national product (NNP)−Indirect business taxes. NNP=Gross national product (GNP)minus−Consumption of fixed capital (depreciation). $11,670 Personal income (PI)=National income − Corporate earnings + Government transfer payments. $11,120 Disposable personal income = Personal income − Personal taxes. 10,120
To calculate personal income from national income, which of the following must the BEA do?
add government transfer payments
Which of the following do we subtract from GDP to obtain national income?
depreciation