chapter 10

Social Security payments are

. excluded from GDP because they do not reflect the economy's production.

because every transaction has a buyer and a seller,

every transaction contributes equally to an economy's income and to its expenditure.

Government purchases include spending on goods and services by

federal, state, and local governments.

Refer to Figure 23-1. Which of the following pairs correctly identify W and Y?

firms and households

During a presidential campaign, the incumbent argues that he should be reelected because nominal GDP grew by 12 percent during his 4-year term in office. You know that population grew by 4 percent over the period and that the GDP deflator increased by 6 percent during the past 4 years. You should conclude that real GDP per person

grew, but by less than 12 percent.

In the GDP accounts production equals

income

The percentage change in the price level from one period to another is called the

inflation rate

A farmer produces oranges and sells them to Fresh Juice, which makes orange juice. The oranges produced by the farmer are called

intermediate goods

The value of goods added to a firm's inventory in a certain year is treated as

investment, since GDP aims to measure the value of the economy's production that year.

In order to include many different goods and services in an aggregate measure, GDP is computed using, primarily,

values of goods and services based on surveys of consumers. WRONG

Over the last few decades, Americans have chosen to cook less at home and eat more at restaurants. This change in behavior, by itself, has

.increased measured GDP by the value added by the restaurant's preparation and serving of the meals

Refer to Table 23-2. What was country A's investment in 2019?

1,999

Refer to Table 23-1. Personal income for Chereaux in 2019 is

178 WRONG

Refer to Table 23-1. The market value of all final goods and services produced within Chereaux in 2019 is

200

refer to Table 23-1. Gross national product for Chereaux in 2019 is

204

If in some year nominal GDP was $20 billion and the GDP deflator was 50, what was real GDP?

40 billion

Refer to Table 23-2. What was country A's consumption in 2019?

4015 WRONG

Refer to Table 23-5. What was this country's nominal GDP in 2016?

9,500 WRONG

Martin, a U.S. citizen, travels to Mexico and buys a newly manufactured motorcycle made there. His purchase is included in

Mexican GDP, but it is not included in U.S. GDP

For the purpose of calculating GDP, investment is spending on

capital equipment, inventories, and structures, including household purchases of new housing.

A newspaper article informs you that most businesses reduced production in the last quarter but also sold from their inventories during the last quarter. Based on this information GDP likely

decreased

Unemployment compensation is

not part of GDP because it is a transfer payment

If real GDP doubles and the GDP deflator doubles, then nominal GDP

quadruples

A country reported nominal GDP of $100 billion in 2010 and $75 billion in 2009. It also reported a GDP deflator of 125 in 2010 and 120 in 2009. Between 2009 and 2010,

real output and the price levels both rose