Chapter 8 - GDP
GDP deflator
(nominal/real) (100)
A new home purchased by a family
final good
The largest component of gross domestic income is
wages
What are the four major categories of expenditure?
Consumption, investment, government purchases, and net exports
National income is
GDP - depreciation
Why is real GDP not a perfect measure of well-being?
GDP does not include crime rates or income distribution, The value of leisure is not included, The costs of pollution are not included
Why is GDP an imperfect measurement of total production in the economy?
GDP does not include household production or production from the underground economy
Which of the following would be included in the gross national product (GNP) of the United States?
Production from a US firm that operates in Mexico
What are the four categories of income?
Wages, interest, rent, and profit
GDP equation
Y = C + I + G + NX
A new truck purchased by a consumer
final good
Coffee beans purchased by a coffee shop
intermediate good
Personal income is
national income - retained corporate earnings + government transfer payments & interest on government bonds
One share of Google stock
neither final or intermediate
Disposable personal income is
personal income - personal taxes
Real GDP < Nominal GDP
prices are rising
