Chapter 3- income and spending

How much (if any) does each of the following transactions raise GDP? The same individual goes to the woods, cuts down a tree, and uses the wood to build himself a garage that is worth $10,000.

0.0

How much (if any) does each of the following transactions raise GDP? An individual pays a carpenter $10,000 to build a garage.

10000.0

Referring to the preceding questions. What is the GDP of Zarcania for 2019? The GDP is $ ______ billion. "Imagine the following fictional country of Zarcania with a population of 5 million people. In 2019, the following happened: Consumer spending increased by $20 billion Businesses built $15 billion worth of new factories The government spent $8 billion on new roads Zarcania exported $4 billion worth of goods Zarcania imported $5 billion worth of goods The government increased social security payments by $1 billion"

42.0

The GDP per capita of Zaracania is $______. "Imagine the following fictional country of Zarcania with a population of 5 million people. In 2019, the following happened: Consumer spending increased by $20 billion Businesses built $15 billion worth of new factories The government spent $8 billion on new roads Zarcania exported $4 billion worth of goods Zarcania imported $5 billion worth of goods The government increased social security payments by $1 billion"

8400.0

Calculate GDP using the expenditure method. GDP in Canada is $billion. PICTURE

9.3

Refer to Table 23-6. In 2010, this country's real GDP was PICTURE a)$620 b)$260 c)$400 d)$630

a)$620

Consider Jolly Old England in which there are just three new, domestically produced goods and services: Soused Hog's Face, Porter and Suet Pudding. Listed below are the prices and quantities of these goods in the base year and the current year in dollars rather than pounds. Real GDP growth in England is: PICTURE a)25% b)-25% c)66% d)33% e)0%

a)25%

Which formula correctly illustrates how to find GDP? a)GDP = C + I + G + (EX - IM) b)GDP = C + I + G + EX c)GDP = C + EX + G d)GDP = G - C

a)GDP = C + I + G + (EX - IM)

In the last few years in the U.S., have imports been greater than or less than exports? a)Imports have been greater than exports, resulting in negative net exports. b)Imports have been less than exports, resulting in positive net exports. c)Imports have been about equal to exports, so next exports were 0.

a)Imports have been greater than exports, resulting in negative net exports.

A man in Washington, DC buys a Volvo directly from Sweden for $30,000. Which of the following is true? Select all that apply. a)The value of consumption increases by $30¸000. b)The value of exports increases by $30¸000. c)The value of imports increases by $30¸000. d)The value of net exports decreases by $30¸000.

a)The value of consumption increases by $30¸000. c)The value of imports increases by $30¸000. d)The value of net exports decreases by $30¸000.

A BMW made in Germany sold to an individual in the U.S. is _____________. a)consumption b)investment c)government d)net exports e)does not affect total GDP

a)consumption d)net exports e)does not affect total GDP

If a country is importing $1 million worth of goods and exporting $800,000, then net exports are: a)$200,000 b)-$200,000 c)-$800,000

b)-$200,000

What happened to the real GDP growth rate during the Great Recession of the late 2000s? a)positive growth b)negative growth rates c)constant growth rates

b)negative growth rates

Consider Jolly Old England in which there are just three new, domestically produced goods and services: Soused Hog's Face, Porter and Suet Pudding. Listed below are the prices and quantities of these goods in the base year and the current year in dollars rather than pounds. Real GDP in the current year for England is (to the nearest dollar): PICTURE a)$1500 b)$2000 c)$2500 d)$1826

c)$2500

Why is the purchase of a share of stock not included in GDP? a)money is not being exchanged when a stock is purchases b)a company sells too many stocks for it to be included c)The purchase of a share of stock does not correspond to the production of a good or service.

c)The purchase of a share of stock does not correspond to the production of a good or service.

Investment in public education and highways counts as what component of GDP? a)consumption b)investment c)government spending d)net exports

c)government spending

There have been recent talks about increasing spending on highways and roads. What component of GDP would that affect? a)consumption(C) b)investment (I) c)government spending(G)

c)government spending(G)

How has recent growth (from 2001 to today) in real GDP per capita for the U.S. compared to the post-WWII period? a)higher b)the same c)lower

c)lower

Imagine a country where Real GDP grew from $300 million to $350 million in 10 years. Meanwhile the population grew from 5 to 7 million. On average, did individuals in the country improve? a)yes b)they stayed the same c)no

c)no

Suppose an economy produces only eggs and ham. In 2009, 100 dozen eggs are sold at $3 per dozen and 50 pounds of ham sold at $4 per pound. In 2010, the base year, eggs sold at $1.50 per dozen and ham sold at $5 per pound. For 2009, a)nominal GDP is $400, real GDP is $500. b)nominal GDP is $500, real GDP is $600. c)nominal GDP is $500, real GDP is $400. d)nominal GDP is $400, real GDP is $600.

c)nominal GDP is $500, real GDP is $400.

Match the activity in Zarcania from 2019 with the component of GDP it effects. consumer spending new factories new roads exported goods sold imported goods bought social security payments

consumer spending- consumption new factories- investment new roads- government spending exported goods sold- net exports imported goods bought- net imports social security payments- not included in GDP

Which of the following is NOT considered in the investment component of GDP? a)Axel's hunting and fishing shop sells a fishing rod to a customer. b)Bill's bakery buys some new ovens and baking equipment. c)Cammie buys a new house. d)Daryl's company builds a new factory.

d)Daryl's company builds a new factory.

How is real GDP measured? a)Current value of all final goods and services produced in a country in a year b)Sum of domestic production in the U.S. in one year minus changes in prices c)Total of all final goods and services consumed in the U.S. valued at a base year's prices d)Total of all final goods and services produced in the U.S. valued at a base year's prices

d)Total of all final goods and services produced in the U.S. valued at a base year's prices

Indicate what category or categories the purchase of services of a U.S. lawyer in the U.S. by a Japanese citizen in Japan would fall under in regards to the U.S. GDP. a)consumption b)investment c)government d)exports e)imports f)not included in GDP

d)exports

A Chevrolet produced in Detroit sold to an Argentine company is ___________. a)consumption b)investment c)government d)net exports e)not included

d)net exports

A share of IBM stock purchased from IBM is ____________. a)consumption b)investment c)government d)net exports e)not included

e)not included

GDP calculated using current year prices is often called ______________ GDP.

nominal

GDP divided by the number of people in the country is called GDP ______________.

per capita

GDP calculated using base year prices is called ______________GDP.

real