Macro Chpt8.4
15) Refer to Table 8-26. What is the level of disposable personal income for this economy?
$980 billion
8) National income equals gross national product minus
depreciation
21) When lumber from Brazilian forests is used by a U.S.-owned company to produce furniture in Canada, the value of the furniture produced will be counted as a final good in
Canada's GDP.
43) Refer to table 8-30. The table above represents hypothetical data from the National Income Accounts for 2020. Use the data to calculate personal income and desposible income
.
19) If a German firm produces cars in the United States, that production should count towards
U.S. GDP.
18) If a U.S. firm produces cars in Mexico, that production should count towards
U.S. GNP.
28) Which of the following would increase disposable personal income?
a decrease in taxes paid
27) An increase in national income could by caused by which of the following?
an increase in gross domestic product
20) Which of the following would increase GNP in the United States?
an increase in the production of U.S.-owned General Motors cars made in Mexico
34) The differences between GDP and GDI
are the result of errors in measuring their components
12) The best measure of the income households actually have available to spend is
disposable personal income.
29) Gross domestic product is generally ________ national income.
greater than
23) National income is defined as
gross domestic product less the consumption of fixed capital
3) The output of U.S. citizens who work in Canada would be included in the
gross domestic product of Canada.
4) If an American firm opens a production facility in India, the total value of the production will be included in the
gross domestic product of India.
2) The output of Mexican citizens who work in Texas would be included in the
gross national product of Mexico
13) Disposable personal income equals personal income
minus personal tax payments
9) National income equals gross domestic product
minus the consumption of fixed capital.
24) Personal income is defined as
national income less retained earnings plus transfer payments and plus interest on government bonds
33) Measuring the economy's output from the income side is done by the Bureau of Economic Analysis using which of the following?
GDI
6) A country in which a significant fraction of domestic production takes place in foreign-owned factories and facilities is most likely a country where
GDP is much larger than GNP
16) National income is equal to
GDP minus depreciation
22) When Ford increases the production of cars in Romania, which of the following occurs?
GNP in the United States rises
7) The value of what a U.S.-owned McDonald's produces in South Korea is included in the U.S. ________ and the South Korean ________.
GNP; GDP
42) Explain the difference between gross domestic product and gross national product. Give an example of each.
Gross domestic product is the value of final goods and services produced within the United States. In contrast, gross national product is the value of final goods and services produced by residents of the United States, regardless if the production takes place in the United States. GNP would include the production from a Ford Plant located in France. GDP would include production from a Honda plant located in Ohio.
41) What are the differences between national income, personal income, and disposable personal income?
National income is gross domestic product (GDP) minus depreciation. Personal income, which is income actually received by households, is national income minus corporations' retained earnings, plus government transfer payments and the interest on government bonds paid to households. Disposable personal income, which represents the income available for households to spend, is personal income less personal tax payments, such as the federal personal income tax.
38) The values of real GDP and real GNP are almost the same for the United States.
TRUE
40) Disposable personal income is equal to personal income minus personal tax payments
TRUE
14) Refer to table 8-26 What is the level of personal income for this economy?
$1,010 billion
32) Refer to table 8-29. Based on the table above, what is personal income for this economy?
$2,030 billion
30) Refer to table 8-27. Based on the table above, wnat is the national income for this economy?
$2,950 billion
11) Suppose that in 2020, the national income in the United States was $200 billion, depreciation was $15 billion, personal taxes were $20 billion, and transfer payments were $10 billion. Gross domestic product in 2020 is
$215 billion.
31) Refer to table 8-28. Based on the table above, what is the national income for this economy?
$4,000 billion
35) The total value of production from Ford's manufacturing plant in Cologne, Germany would be included in Germany's gross national product.
FALSE
36) Transfer payments are subtracted from national income to get to personal income.
FALSE
37) For developed countries like the United States, GDP will always exceed GNP.
FALSE
39) The values of real GDP and real GNP are almost the same in countries where a significant fraction of domestic production takes place in foreign-owned firms.
FALSE
25) Disposable personal income is defined as
personal income less personal taxes
1) Gross national product (GNP) of the United States is the market value of all final goods and services
produced by citizens of the United States anywhere in the world.
26) National income is derived from gross domestic product by
subtracting depreciation from gross domestic product.
5) Which of the following is included in both the U.S. GDP and U.S. GNP?
the value of all cars produced by General Motors in the United States
17) U.S. gross national product is defined as
the value of final goods and services produced by residents of the United States even if the production takes place outside of the United States.
10) Depreciation is
the value of worn-out equipment, machinery, and buildings.