Economics: GDP

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

Computer by an accounting firm.

To calculate GDP by the expenditure method, one must add...

Consumption spending, investment spending, government spending, and net exports.

What is the largest component of spending in the United States?

Consumption spending.

The size of the underground economy would tend to decrease if the government of a country...

Decreased government regulations on businesses.

An example of an intermediate good would be...

The bread that goes into a sub sandwich that is sold by Quiznos.

Which of the following could cause nominal GDP to increase, but real GDP to decrease?

The price level rises and the quantity of final goods and services produced falls.

In calculating gross domestic product, the Bureau of Economic Analysis uses the sum of the market value of final goods and services produced. This means that the BEA...

values goods and services at their market prices, multiplies them by the quantity produced, and then adds them up.

An example of a transfer payment is...

A welfare payment.

Increases in real GDP would understate the well-being of a country over time if, over that time period, the...

Amount of pollution decreased.

Which of the following transactions represents the purchase of a final good?

Father buys a new riding mower.

The ________ is a measure of the price level and is calculated by dividing ________ by ________ and multiplying by 100.

GDP deflator; nominal GDP; real GDP

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

Household production.

Which of the following is not directly counted in GDP?

Intermediate goods

Real GDP will increase,

Only if the quantity of final goods and services produced rises.

Nominal GDP is GDP in a given year...

Valued in prices of that year.

Macroeconomics seeks to understand,

economic growth, business cycles, and inflation.