Chap 7

The Census Bureau's Retail Trade Survey.

(Last Word) Which of the following is a source of data for the consumption component of the U.S. GDP?

when gross investment exceeds replacement investment.

An economy is enlarging its stock of capital goods:

$314.

Answer the question on the basis of the following data. All figures are in billions of dollars. personal tax $40 social security contributions 15 taxes on production 20 corporate income taxes 40 transfer payments 22 U.S. exports 24 undistributed corp profits 35 gov purchases 90 gross priv. domestic invest. 75 U.S. imports 22 personal cons. expenditure 250 consumption of fixed capital 25 net foreign factor income 10 statistical discrepency 0 Refer to the above data. PI is:

$5

Answer the question on the basis of the following data. All figures are in billions of dollars. Gross Investment 18 National Income 100 Net Exports 2 Personal income 85 Personal Consumption Expenditures 70 Saving 5 Government Purchases 20 Net Domestic Product 105 Statistical Discrepancy 0 Refer to the above data. Consumption of fixed capital is:

d) $228.

Answer the question on the basis of the following data. All figures are in billions of dollars. Gross Private Domestic Investment 46 Exports of the US 9 Disposable Income 190 Personal Saving 10 Government Purchases 84 Net Foreign Factors Income 10 Consumption of Fixed Capital 52 Dividends 13 Imports of the US 12 Taxes on Production and Imports 22 Personal Taxes 38 Social Security Contributions 23 Statistical Discrepancy 0 Refer to the above data. Personal income is:

$45.

Answer the question on the basis of the following information: Only three goods are produced in an economy in the following amounts: A = 10, B = 30, C = 5. The current year per unit prices of these three goods are A = $2, B = $3, and C = $1. Refer to the information. Nominal GDP in the current year is:

100

Assume an economy that is producing only one product. Output and price data for a three-year period are as follows. Answer the question on the basis of these data. Year: Units of output: Pricer Per unit 1:20:$4 2:25:$4 3:30:6 Refer to the data. If year 2 is chosen as the base year, the price index for year 1 is:

nominal GDP overstates increases in real output

Assume an economy that makes only one product and that year 3 is the base year. Output and price data for a five-year period are as follows. Answer the question on the basis of these data year: 1 2 3 4 5 units of output: 3,4,6,7,8 Price per unit: 3,4,5,7,8, Refer to the data. For the years shown, the growth of:

b) 60

Assume an economy that makes only one product and that year 3 is the base year. Output and price data for a five-year period are as follows. Answer the question on the basis of these data. year: 1, 2, 3, 4, 5 unit output: 3, 4, 6, 7, 8 unit price: 3, 4, 5, 7, 8 Refer to the data. If year 3 is chosen as the base year, the price index for year 1 is:

$30

Assume that a manufacturer of stereo speakers purchases $40 worth of components for each speaker. The completed speaker sells for $70. The value added by the manufacturer for each speaker is:

obtain a sum substantially larger than the GDP.

By summing the dollar value of all market transactions in the economy we would:

summing corporate income taxes, dividends, and undistributed corporate profits.

Corporate profits are found by:

government consumption goods and public capital goods.

Government purchases include government spending on:

-follow the long-run course of the economy to determine whether it has grown or stagnated

The National Income and Product Accounts (NIPA) help economists and policymakers to:

PI.

Transfer payments are included in:

$200

Use the following table for a hypothetical single-product economy. Picture Refer to the data. Real GDP in year 4 is:

d) National income represents income earned by American-owned resources, while personal income measures received income, whether earned or unearned.

What is the difference between national income and personal income?

domestic investment exceeds depreciation.

When an economy's production capacity is expanding:

disposable income

Which of the following is the smallest dollar amount in the United States?

is the dollar value of the total output produced by its citizens, regardless of where they are living.

A nation's gross domestic product (GDP):

$380.

Answer the question on the basis of the following data. All figures are in billions of dollars. Proprietor's Income 20 Compensation of Employees 300 Consumption of Fixed Capital 15 Gross Investment 80 Rents 10 Interests 20 Exports 30 Imports 50 Corporate Profits 25 Taxes on Production and Imports 5 Net Foreign Factor Income 0 Statistical Discrepancy 0 Refer to the above data. National income is:

b) $380.

Answer the question on the basis of the following data. All figures are in billions of dollars. Proprietor's Income 20 Compensation of Employees 300 Consumption of Fixed Capital 15 Gross Investment 80 Rents 10 Interests 20 Exports 30 Imports 50 Corporate Profits 25 Taxes on Production and Imports 5 Net Foreign Factor Income 0 Statistical Discrepancy 0 Refer to the above data. Net domestic product is:

Refer to the above data. GDP is: $121

Answer the question on the basis of the following data. All figures are in billions of dollars: Government Purchases $15 Consumption 90 Gross investment 20 consumption of fixed capital 5 exports 8 imports 12 .

$116.

Answer the question on the basis of the following data. All figures are in billions of dollars: Government Purchases 15 Consumption 90 Gross Investment 20 Consumption of Fixed Capital 5 Exports 8 Imports 12 Refer to the above data. NDP is: a) $116. b) $121. c) $125. d) $150.

rising real GDP.

Answer the question on the basis of the following information: Year: Nominal GDP: Price Index 1:$550:140 2:$560:135 3:$576:120 4:$586:117 5:$604:108 The economy above has experienced a:

$45.

Answer the question on the basis of the following information: Only three goods are produced in an economy in the following amounts: A = 10, B = 30, C = 5. The current year per unit prices of these three goods are A = $2, B = $3, and C = $1. (Advanced analysis) Refer to the information. If the per unit prices of the three goods were each $1 in a base year used to construct a GDP price index, then real GDP in the current year is:

255.5.

Answer the question on the basis of the following information: Only three goods are produced in an economy in the following amounts: A = 10, B = 30, C = 5. The current year per unit prices of these three goods are A = $2, B = $3, and C = $1. (Advanced analysis) Refer to the information. If the per unit prices of the three goods were each $1 in a base year used to construct a GDP price index, then the GDP price index in the current year is:

$623

Answer the question on the basis of the following national income data for the economy. All figures are in billions of dollars. Personal Consumption Expenditures 400 Government Purchases 128 Gross Private Domestic Investment 88 Net Exports 7 Net Foreign Factor Income 0 Consumption of Fixed Capital 43 Taxes on Production and Imports 50 Compensation of Employees 369 Rents 12 Interests 15 Proprietor's Income 52 Corporate Income Taxes 36 Dividends 24 Undistributed Corporate Profits 22 Statistical Discrepancy 0 The gross domestic product for the above economy is:

A

Answer the question on the basis of the following national income data. All figures are in billions of dollars. Personal Taxes 23 Net Private Domestic Investment 33 Net Exports 6 National Income 278 US Exports 20 Gross Private Domestic Investment 56 Disposable Income 220 Taxes on Production and Imports 32 Undistributed Corporate Profits 15 Proprietor's Income 45 Net Foreign Factors Income 0 Statistical Discrepancy 0 Refer to the above data. Consumption of fixed capital (private sector) is: a) $23. b) $14. c) $32. d) $26.

125 percent higher than the nominal GDP for year 1.

Assume an economy that is producing only one product. Output and price data for a three-year period are as follows. Answer the question on the basis of these data. Year: Units of output: price per unit 1:20:$4 2:25:$4 3: 30: $6 Refer to the data. The nominal GDP for year 3 is:

$180 and $120.

Assume an economy that is producing only one product. Output and price data for a three-year period are as follows. Answer the question on the basis of these data. year units of output price per unit 1 20 4 2 25 4 3 30 6 Refer to the above data. If year 2 is chosen for the base year, in year 3 nominal GDP and real GDP, respectively, are: a) $180 and $30. b) $30 and $5. c) $180 and $120. d) $120 and $100.

consumption, investment, government purchases, and net exports.

GDP can be calculated by summing:

monetary value of all economic resources used in producing a year's output.

GDP is the:

$110

GROSS INVESTMENT: $18 NATIONAL INCOME: 100 NET EXPORTS: 2 PERSONAL INCOME: 85 PERSONAL CONSUMPTION EXPENDITURES: 70 SAVING: 5 GOVERNMENT PURCHASES: 20 NET DOMESTIC PRODUCT: 105 STATISTICAL DISCREPANCY: 0 The gross domestic product for the above economy is:

in dollar amounts and percentage growth.

Gross domestic product (GDP) measures and reports output

A

Gross investment→$ 18 National income→100 Net exports→2 Personal income→85 Personal consumption expenditures→70 Saving→5 Government purchases→20 Net domestic product→105 15. Refer to the above data. From this information we can conclude that the sum of indirect business taxes and net foreign factor income is. A) $5 billion. B) zero. C) $1 billion. D) $15 billion.

net investment is negative.

If depreciation (consumption of fixed capital) exceeds gross domestic investment, we can conclude that:

the economy's stock of capital is shrinking.

If depreciation exceeds gross investment:

increased by $65 billion.

If in some year gross investment was $120 billion and net investment was $65 billion, then in that year the country's capital stock:

the GDP would be overstated.

If intermediate goods and services were included in GDP:

175.

If nominal GDP in some year is $280 and real GDP is $160, then the GDP price index for that year is:

the sum of Social Security contributions, corporate income taxes, and undistributed corporate profits exceeded transfer payments.

If personal income exceeds national income in a particular year, we can conclude that:

this amount should be included in calculating that year's GDP.

If the economy adds to its inventory of goods during some year:

the production of 1933's GDP used up more capital goods than were produced in that year.

In 1933, net private domestic investment was a minus $6.0 billion. This means that:

Disposable income.

In a typical year, which of the following measures of aggregate output and income is likely to be the smallest?

changes in nominal GDP understate changes in real GDP.

In an economy experiencing a persistently falling price level:

the price level may change over time.

In comparing GDP data over a period of years, a difference between nominal and real GDP may arise because:

purchases by federal, state, and local governments.

In national income accounting, government purchases include:

only counting final goods.

National income accountants can avoid multiple counting by:

a nation's imports exceed its exports.

Net exports are negative when:

exports - imports.

Net exports are:

the Consumer Price Index (CPI).

Nominal GDP is adjusted for price changes through the use of:

GDP data that have been adjusted for changes in the price level.

Real GDP refers to:

Nominal GDP must be deflated in each year since 2000 to determine real GDP.

Refer to the diagram. Which of the following statements is correct?

$200,000

Setup Corporation buys $100,000 of sand, rock, and cement to produce ready-mix concrete. It sells 10,000 cubic yards of concrete at $30 a cubic yard. The value added by Setup Corporation is:

We need more information to determine whether GDP has changed.

Suppose Smith pays $100 to Jones.

increased by $60 billion.

Suppose nominal GDP was $360 billion in 1990 and $450 billion in 2000. The appropriate price index (1985 = 100) was 120 in 1990 and 125 in 2000. Between 1990 and 2000 real GDP:

add $10 billion to other elements of investment in calculating total investment.

Suppose that inventories were $40 billion in 2012 and $50 billion in 2013. In 2013, national income accountants would:

Bureau of Economic Analysis

The agency responsible for compiling the National Income Product Accounts for the U.S. economy is the

total investment less the amount of investment goods used up in producing the year's output.

The concept of net domestic investment refers to:

consumption

The largest component of total expenditures in the United States is:

productive but is excluded from GDP because no market transaction occurs.

Tom Atoe grows fruits and vegetables for home consumption. This activity is:

$450.

Use the following table for a hypothetical single-product economy. year units of output price per unit price index (1=100) 1 10 10 100 2 12 20 200 3 15 30 300 4 20 40 400 Refer to the above data. Nominal GDP in year 3 is: a) $100. b) $450. c) $225. d) $150.

D

Use the following table for a hypothetical single-product economy. year units of output price per unit price index (1=100) 1 10 10 100 2 12 20 200 3 15 30 300 4 20 40 400 Refer to the above data. Nominal GDP in year 4 is: a) $320. b) $450. c) $225. d) $800.

subtracting the purchase of intermediate products from the value of the sales of final products.

Value added can be determined by:

Income received by households less personal taxes.

Which of the following best defines disposable income?

The purchase of a new house.

Which of the following do national income accountants consider to be investment?

A haircut purchased by a father for his 12 year-old son.

Which of the following is a final good or service?

Peter buys a newly constructed house.

Which of the following transactions would be included in GDP?