Macro: Quiz 4 Version 1

Consumption of Fixed Capital: 60 Disposable Income: 200 Net Private Domestic Investment: 40 US Imports: 15 National Income: 300 Personal Taxes: 31 Net Exports: 9 Gross Private Domestic Investment: 55 Net Foreign Factor Income: 10 Statistical Discrepancy: 0 Refer to the above data. The amount of private capital used up, or depreciation, is: A) $15 billion B) $20 billion C) $25 billion D) $30 billion

A

The total income earned through the use of resources, plus taxes on production and on imports, equals: A) National income B) Gross domestic product C) Personal income D) Disposable income

A

(GDP in billions of dollars) Year Nominal GDP Real GDP Price Index 1 5,200 4,800 ___________ 2 5,500 _______ 112 3 5,740 5,000 ___________ Refer to the above table. What is the GDP price index in Year 1? A) 105.2 B) 108.3 C) 109.6 D) 111.5

B

Data using base 1 as base year Year Nominal GDP Price Index 1 3,166 100 2 3,402 104 3 3,774 108 4 3,989 112 Refer to the above data. Real GDP in year 4 was approximately: A) $3,989 billion B) $3,562 billion C) $3,774 billion D) $3,494 billion

B

Gross private domestic investment is the value of capital goods bought by firms plus: A) The consumption of fixed capital and changes in business inventories B) All construction and changes in business inventories C) All business inventories and all construction D) Plus the consumption of fixed capital and all construction

B

If prices increased, we need to adjust nominal GDP values to give us a measure of GDP for various years in constant-dollar terms. We refer to that adjustment as: A) Inflating GDP B) Deflating GDP C) Compounding GDP D) Indexing GDP

B

Personal income will equal disposable income when: A) Corporate profits are zero B) Personal taxes are zero C) Transfer payments are zero D) Social Security contributions are zero

B

The base year is 2005, and the GDP price index in 2004 is 92.0. This implies that the: A) Output in 2005 was higher than in 2004 B) Prices in 2005 was higher than in 2004 C) Output in 2005 was lower than in 2004 D) Prices in 2005 was lower than in 2004

B

A business buys $5,000 worth of inputs from other firms in order to produce a product. The business makes 100 units of the product and each of them sells for $65. The value added by the business to these products is: A) $5,000 B) $6,500 C) $1,500 D) $1,000

C

Consumption of Fixed Capital: 60 Disposable Income: 200 Net Private Domestic Investment: 40 US Imports: 15 National Income: 300 Personal Taxes: 31 Net Exports: 9 Gross Private Domestic Investment: 55 Net Foreign Factor Income: 10 Statistical Discrepancy: 0 Refer to the above data. United States exports are: A) $9 billion B) $16 billion C) $24 billion D) $28 billion

C

If real GDP declines in a given year, nominal GDP: A) Must also be declining B) Must also be increasing C) May either rise or fall D) Is likely to remain constant

C

If the price index is 130, this means that: A) Prices are 130 percent higher than in the base year B) Prices are .13 times that in the base year C) Prices are 30 percent higher than in the base year D) Nominal GDP must be inflated to determine the real GDP

C

National income is the sum of employee compensation, profits, and the following items, except: A) Rent B) Interest C) Depreciation or consumption of fixed capital D) Taxes on production and imports

C

Net Foreign Factor Income: 8 Corporate Profits: 47 Gross Private Domestic Investment: 73 Proprietors Income: 46 Dividends: 13 Consumption of Fixed Capital: 41 Social Security Contributions: 10 US Exports: 23 Government Purchase: 97 Personal Consumption Expenditures: 314 Transfer Payments: 27 Imports of the US: 24 Personal Taxes: 46 Corporate Income Taxes: 23 Taxes on Production and Imports: 50 Interest: 16 Undistributed Corporate Profits: 11 Statistical Discrepancy: 66 Refer to the above data. Disposable income is: A) $383 billion B) $372 billion C) $271 billion D) $212 billion

C

The following are national income account data for a hypothetical economy in billions of dollars: gross private domestic investment ($320); imports ($35); exports ($22); personal consumption expenditures ($2,460); and, government purchases ($470). What is GDP in this economy? A) $3,250 billion B) $3,263 billion C) $3,237 billion D) $3,290 billion

C

The two ways of looking at GDP are the: A) Output approach and expenditures approach B) Income approach and saving approach C) Expenditures approach and income approach D) Output approach and consumption approach

C

Year Nominal GDP Real GDP Price Index 1 5,200 4,800 ___________ 2 5,500 _______ 112 3 5,740 5,000 ___________ Refer to the above table. What was real GDP in Year 2? A) $4,820 billion B) $4,875 billion C) $4,911 billion D) $5,320 billion

C

An example of intermediate goods would be: A) Bricks bought by a homeowner for constructing a patio B) Sacks of groceries bought by a dentist for his family C) Cars bought by a car-rental company D) Paper and ink bought by a publishing company

D

In an economy that is experiencing a shrinking production capacity: A) Gross domestic investment is negative B) Net private domestic investment is zero C) Depreciation is negative D) Depreciation exceeds gross investment

D

Money spent on the purchase of a new house is included in the GDP as a part of: A) Household expenditures on durable goods B) Personal consumption expenditures C) Personal saving D) Gross domestic private investment

D