econ ch 15 measuring the economy
Which of the following would be included in the GDP?
Goods that are produced by foreigners within the domestic borders of a nation.
In economics, the term investment refers to what?
Gross private domestic investment.
Which of the following scenarios would be included when calculating the GDP?
Margie buys a new set of sunglasses that were made in the US.
When economists estimate Gross Domestic Product using the income approach, which types of income are included?
Rent, wages, interest, and profit.
Which of the following would NOT be included in consumption?
Welfare checks received
Which of the following is NOT a valid exchange medium for factors of production?
imports
What does the word domestic in Gross Domestic Product refer to?
All goods and services that are produced within a nation's domestic borders.
What is the GDP for the following information: Consumption = 10,000 Investment = 2,000 Government spending = 1,000 Exports = 7,500 Imports = 7,000
13,500
What are the main categories of investment?
Business expenditures, new residential housing, and changes in business inventories.
Which of the following statements is true regarding the relationships in a market economy?
Businesses pay wages, interest, and profits to households in exchange for use of their factors of production.
Which of the following is true when using the income approach to measure GDP?
It measures total income earned by all households in a nation.
If you needed to increase the GDP, why might you focus on consumption to do this?
Consumption is the largest share.
What happens when a computer gets produced this year and distributed to a retail store's inventory?
It will be counted as an investment until it is sold.
Which of the following is an injection into the circular flow model?
Exports
Which is TRUE of the market value of an intermediate good?
It will not be counted in the GDP because it is not a final good.
What does the circular flow model of the economy illustrate?
Injections and leakages that take place in the economy.
Tommy's Tweezers has had a change in inventory, increasing by 100,000. What component of the GDP would this affect?
Investment
Which of the following statements is NOT true regarding investment?
Investment refers to purchases of stocks, bonds, or mutual funds.
When savings leaks out of the circular flow model, what happens to it?
It flows to borrowers who then inject it back into the economy.
How is investment, in economics, related to spending?
It is more concerned with business spending than consumer spending.
Which of the following statements is NOT true regarding the expenditure approach?
It measures the total income earned by households.
What are the factors of production?
Land, labor, capital, and entrepreneurship.
When calculating GDP, transfer payments are
Not counted in the GDP.
What are the two methods economists use to measure Gross Domestic Product (GDP)?
The income and expenditure approach.
Why would the revenue of a singer from the United States that held a concert abroad not included in the U.S. GDP?
The service happened outside of the U.S.