Macro Chapter 12 Homework
GDP minus depreciation.
National Income is
GDP minus depreciation.
National income is
households
The circular-flow diagram shows that all sources of income are owned by
total expenditure; total income
The circular-flow diagram shows that ________ should equal ________.
a decrease in total production.
A recession occurs when an economy experiences a period in which there is
Each measure of production and income gives a different value for total production and income.
Based on the above table and graph, which of the following statements regarding total production and total income is true?
personal income minus personal taxes.
Disposable personal income is
the market value of all final goods and services produced in a country during a period of time.
Gross Domestic Product (GDP) is
How does the price of corn change if the price of wheat increase? Microeconomics Identify the best measurement of total output in the US economy. Macroeconomics How will an increase in government spending impact the inflation rate? Macroeconomics The most efficient market structure is perfect competition. Microeconomics
Identify whether the following topics belong in microeconomics or macroeconomics:
Coffee beans purchased by a coffee shop Intermediate good One share of Google stock Neither A new pick-up truck purchased by a consumer Final good A new home purchased by a family Final good
Indicate whether each of the following is a final good, an intermediate good, or neither.
firms produce goods, however sometimes the goods may be unsold at the time GDP is computed.
Inventories are part of investment and therefore included in GDP because
net exports.
One major component of GDP that can be negative is
national income minus retained corporate earnings plus government transfer payments and interest on government bonds.
Personal income is
A. GDP does not include crime rates or income distribution. B. The costs of pollution are not included. C. The value of leisure is not included. answerD. All of the above.
Real GDP per capita LOADING... is often used as a measure of general well-being. While increases in real GDP often do lead to increases in the well-being of the population, why is real GDP not a perfect measure of well-being?
RGDP < NGDP because prices are rising.
Suppose the base year is 2001. Looking at GDP data from the United States from 2001 to the present, what would be true of the relationship between nominal GDP and real GDP LOADING... ?
total production experiences periods of increases and periods of decreases.
The business cycle exists because
microeconomics studies smaller parts of the economy such as markets and individuals, while macroeconomics studies the economy as a whole.
The difference between microeconomics and macroeconomics is
Consumer spending on services is less than the sum of spending on durable and nondurable goods.
The figure above shows the values of the components of GDP for the year 20142014. Based on the data shown, which of the following statements regarding the components of GDP are false?
Firm Value of Product Value Added By: Value Added Equals Cotton farmer Raw Cotton = $11 The cotton farmer 11 Textile mill Cotton woven into cotton fabric = $33 The textile mill = $33minus−$11 = 22 Shirt company Fabric made into a shirt = $1515 The shirt company = $1515minus−$33 = 1212 L.L.Bean Shirt sold on L.L.Bean's website = $3535 L.L.Bean = $3535minus−$1515 = 2020 Total Value Added = $11 + $22 + $1212 + $2020 = 3535
The following table illustrates the value added LOADING... approach to calculating GDP. Please complete the table.
wages.
The largest component of gross domestic income LOADING... is
Gross domestic income is measured precisely.
The table and figure above show GDP measured in terms of the total income received by households. Use the table and figure to help determine which of the following statements about the division of income is false.
transfer payments are simply transfers of income from one group to another and not a purchase of a new good or service.
Transfer payments are not included in GDP calculations because
When nominal GDP increases, real GDP falls.
Use the graph to help determine which one of the following statements regarding nominal and real GDP is FALSE.
greater than
Wages earned by households make up greater than 50% of the total income earned in the U.S. economy.
Wages, Interest, Rent, and Profit
What are the four categories of income?
Consumption, investment, government purchases, and net exports
What are the four major categories of expenditure?
households can use some of their income to purchase goods from foreigners as imports.
When examining the circular-flow diagram,
wages.
When looking at GDP as the amount of total income, the largest component of total income in the U.S. is
Y = C+I+G+NX
Which of the following equations sums up the components of Gross Domestic Product (GDP)?
Spending on services is smaller than the amount of consumption spending on durable and nondurable goods.
Which of the following statements about the consumption component of GDP is not correct? A. The consumption component of GDP in the U.S. is greater than all three of the other components (government, investment, and net exports) combined. B. Consumption as a fraction of total GDP in the U.S. is larger compared to all other high income nations in the world. C. Spending on services is smaller than the amount of consumption spending on durable and nondurable goods. D. Since 1960, the consumption component of GDP has generally increased as a fraction of GDP.
Production from a U.S. firm that operates in Mexico.
Which of the following would be included in the gross national product (GNP) of the United States?
GDP does not include household production or production from the underground economy.
Why is GDP an imperfect measurement of total production in the economy?
