CH7 Econ

A company has sales of $200. It buys raw materials for $50. Its value added will be:

$150

If C = 200, I = 30, G = 10, X = 5, and M = 4 then, GDP will equal:

241

Which is the most volatile or variable component of GDP using the expenditure approach?

I

Which of the following government expenditures would be a transfer payment?

Social Security benefit

What is the major determinant of the level of consumption in the economy?

Yd

Which of the following was not mentioned as a reason why GDP is not a perfect measure of the well-being of a society? It does not include a consideration of:

government services

Which of the following is included in GDP as Consumption?

my new lawn mower

If an economy's prices increase but its output remains the same which of the following will increase?

nominal GDP but not real GDP

A welfare payment is included in GDP as:

not included

The purchase of 100 shares of GM stock is included in GDP as:

not included

Business cycles have reoccurred in the U.S.

there is no regular pattern of reoccurrence

The problem of double counting is avoided by using:

value added

Which is the largest component of GDP using the income approach?

wages/labor income

Which is the largest component of GDP using the expenditure approach?

C

Any change which improves the well-being of society will be reflected in GDP.

False

Disposable income is defined as income in excess of spending on necessities.

False

The government annually estimates the size of underground/illegal activity and includes it in the GDP figures.

False

If all sales by all companies in an economy are added together the result will:

exceed GDP

The value of the tomatoes I grow in my back yard and give to my neighbors:

excluded from GDP because they don't go through a market