Macroeconomics - Chapter 18 Homework
The following table illustrates the value added approach to calculating GDP. Please complete the table.
$20, $37
Consider the following simple economy that produces only three goods:
$6680 Prices from 2009 (Base year) X Quantity from 2017= $6680
Real GDP per capita 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?
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. D. All of the above Answer: All of the above.
The following table gives nominal and real GDP for an economy for two years.
Based on the table, in Year 2, the value of the GDP deflator is 116.7 (Round your answer to one decimal place.) The inflation rate between Year 1 and Year 2 is 5.7 (Round your answer to one decimal place.)
The figure shows the values of the components of GDP for the year 2020. Based on the data shown, which of the following statements regarding the components of GDP is false?
Consumer spending on services is less than the sum of spending on durable and nondurable goods.
What are the four major categories of expenditure?
Consumption, investment, government purchases, and net exports.
Based on the table and graph, which of the following statements regarding total production and total income is true?
Each measure of production and income gives a different value (even if only slightly) for total production and income.
Why is GDP an imperfect measurement of total production in the economy?
GDP does not include household production or production from the underground economy.
National income is
GDP minus depreciation.
The table and figure 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.
Gross domestic income is measured precisely.
A simple economy produces two goods, Corn Bread and Software. Price and quantity data are as follows:
In Year 2, nominal GDP is equal to: $107662.50 and real GDP is $53900.00 (enter both responses rounded to the nearest penny).
In 2011, the value of the GDP deflator is enter your response here. (Enter your response rounded to the nearest whole number.)
In 2011, the value of the GDP deflator is 115 (Enter your response rounded to the nearest whole number.) In 2012, the value of the GDP deflator is 119 (Enter your response rounded to the nearest whole number.)
Identify whether the following topics belong in microeconomics or macroeconomics: How does the price of corn change if the price of wheat increase? ▼ Identify the best measurement of total output in the US economy. ▼ How will an increase in government spending impact the inflation rate? ▼ The most efficient market structure is perfect competition. ▼
Micro Macro Macro Micro
Which of the following would be included in the gross national product (GNP) of the United States?
Production from a U.S. firm that operates in Mexico.
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?
RGDP < NGDP because prices are rising.
Which of the following statements about the consumption component of GDP is not correct?
Spending on services is smaller than the amount of consumption spending on durable and nondurable goods.
What are the four categories of income?
Wages, Interest, Rent, and Profit.
Which of the following equations sums up the components of Gross Domestic Product (GDP)?
Y= C+I+G+NX
A recession occurs when an economy experiences a period in which there is
a decrease in total production.
Inventories are part of investment and therefore included in GDP because
firms produce goods, however sometimes the goods may be unsold at the time GDP is computed.
Wages earned by households make up ▼ exactly greater than less than 50% of the total income earned in the U.S. economy.
greater than
The circular-flow diagram shows that all sources of income are owned by
households
When examining the circular-flow diagram,
households can use some of their income to purchase goods from foreigners as imports.
Indicate whether each of the following is a final good, an intermediate good, or neither. Coffee beans purchased by a coffee shop ▼ One share of Google stock ▼ A new pick-up truck purchased by a consumer ▼ A new home purchased by a family
intermediate good neither final good final good
If prices rise over time, then real GDP will be
larger than nominal GDP in years before the base year.
The difference between microeconomics and macroeconomics is
microeconomics studies smaller parts of the economy such as markets and individuals, while macroeconomics studies the economy as a whole.
Personal income is
national income minus retained corporate earnings plus government transfer payments and interest on government bonds.
One major component of GDP that can be negative is
net exports
Disposable personal income is
personal income minus personal taxes.
Gross Domestic Product (GDP) is
the market value of all final goods and services produced in a country during a period of time
The business cycle exists because
total production experiences periods of increases and periods of decreases.
The circular-flow diagram shows that ________ should equal ________.
total expenditure; total income
Transfer payments are not included in GDP calculations because
transfer payments are simply transfers of income from one group to another and not a purchase of a new good or service.
The largest component of gross domestic income is
wages
When looking at GDP as the amount of total income, the largest component of total income in the U.S. is
wages
