chapter 12 homework

An example of business fixed investment spending is

a purchase of a bond by General Electric Corporation.

Table 12-3 Consumption expenditures$800 Investment expenditures200 Government purchases300 Exports100 Imports200 Wages800 Refer to Table 12-3. Consider the data above (in billions of dollars) for an economy: Gross domestic product (in billions of dollars) for this economy equals

$1,200.

Table 12-4 Consumption expenditures$800 Investment expenditures300 Government purchases300 Government transfer payments400 Exports300 Imports100 Refer to Table 12-4. Consider the data above (in billions of dollars) for an economy: Gross domestic product (in billions of dollars) for this economy equals

$1,600.

Which of the following is not true about the composition of GDP in 2018?

NOT Purchases made by state and local governments are greater than purchases made by the federal government.

Gross domestic product is calculated by summing up

NOT the total market value of goods and services in the economy.

Nominal GDP is GDP in a given year

NOT adjusted for anticipated inflation.

Which of the following goods is directly counted in GDP?

a 12-inch Subway sandwich purchased by a student

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

decreased government regulations on businesses.

The purchase of a new automobile is included in

consumption expenditures on durable goods.

To calculate GDP by the expenditure method, one must add

consumption spending, investment spending, government purchases, and net exports.

Legalizing all forms of illegal activities

increases GDP and reduces the size of the underground economy.

Which of the following is not directly counted in GDP?

intermediate goods

The purchase of a new house is included in

investment expenditures.

In 2018, which component of GDP had a negative value?

net exports

An example of an intermediate good would be

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