econ quiz 5

What are the four major components of expenditures in GDP

Consumption, investments, government purchases, and net exports

Briefly explain whether you agree with this definition of GDP

Disagree, because GDP measures the value of all final goods and services produced in an economy, not all goods and services produced.

which of the following is considered to be a problem in using GPD as a measure of national well being

GPD is not adjusted for changes in crime and other social problems

The purchase of a new fleet of police cars by the local government

Is the purchase of a final good

The purchase of a new plane by American airlines

Is the purchase of a final good

The purchase of domestic wine by a French consumer.

Is the purchase of a final good

Suppose a house is built and sold in the year 2000. If the house is resold in the year 2022, is the value of the house included in Gross Domestic Product for 2022?

No. GDP for 2022 includes only production that occurs in 2022

What are the four categories of income?

Wages, interest, rent, and profit

Which equation represents the relationship between GDP and the four major expenditure​ components?

Y=C+I+G+NX

Would the service of a real estate agent who helped sell (or helped buy) the house be included in GDP for 2022?

Yes. GDP for 2022 includes the market value of final goods and services. This includes real estate services.

which of the following wanted transactions is not counted in GPD

a consumer purchases illegal from a street vendor

even if gpd included these types of production, why would it still be an imperfect measure of economic well being

all of the above

Determine if this is a final good, intermediate good, or neither: a new home purchased by a family

final good

Determine if this is a final good, intermediate good, or neither: a new pickup truck purchased by a consumer

final good

Inventories are part of investment and therefore included in GPD because

firms produce goods, however sometimes the goods may be unsold at the time GPD is computed

GPD is an imperfect measure of economic well being because it fails to measure what types of production

household production and the underground economy

Determine if this is a final good, intermediate good, or neither: coffee beans purchased by a coffee shop

intermediate

The purchase of tires from Bridgestone tire company by an automobile manufacturer

is not the purchase of a final good

Determine if this is a final good, intermediate good, or neither: one share of google stock

neither

in calculating GPD, which levels of government spending are included in government purchases

spending by federal, state, and local governments

GDP is

the market value of all final goods and services produced in a country during a period of time

Which is included in economists definition of investment

the purchase of new machines, factories, or houses

Transfer payments are not included in GPD calculations because

transfer payments are simply transfers of income from one group to another and not a purchase of a new good or service