Chapter 10 Measuring a nation's Income

According to the circular-flow diagram GDP

Can be computed as either the revenue firms receive from the sales of goods and services or the payments the make to factors of production.

Retained earning is income that

Corporations have earned but have not paid out to their owners

A recession has traditionally been defined as a period during which

real GDP declines for two consecutive quarters.

Which of the following is always measured in prices from a base-year

real but not nominal GDp

In the base year, the GDP deflator is always

100

In the united states in 2009, purchases of capital equipment, inventories, and structures represented approximately

11 percent of GDP

In the United States in 2009, Consumption represented approximately

70 percent of GDP

A transfer payment is

A form of government spending that is not made in exchange for a currently produced good or services

which of the following is included in the investment component of GDP

All of the above are included in the investment component of GDP

Macroeconomists study

Economy-Wide phenomena

How does U.S gross domestic product (GDP) differ from U.S gross national product (GNP)

GNP= GDP + income earned by U.S citizens abroad - income that foreign citizens earned in the U.S.

Which of the following statistics is usually regarded as the best single measure of a society's economic well-being?

Gross domestic product

Disposable personal income is the income that

Households and non corporate businesses have left after paying taxes and non-taxes payments to the government.

U.S GDP

Includes production of foreigners working in the U.S but excludes production but excludes production by U.S. residents working in foreign countries

GDP

Is used to monitor the performance of the overall economy and is the single best measure of a society's economic well-being.

which of the following statements about GDP is correct?

Nominal GDP values production at current prices, whereas real GDP values production at constant prices

When Economists talk about growth in the economy, they measure that growth as the

Percentage change in real GDP from one period to another.

When studying changes in the economy over time, economists want a measure of the total quantity of goods and services the economy is producing that is not affected by changes in the prices of those goods and services. in other words, economists want to study.

Real GDP

which of the following is always measured in prices from a base-year?

Real but not nominal GDP

Which of the following is included in the investment component of GDP

Spending on new business equipment such as power tools but not spending on stocks and binds.

GDP is Defined as the

Value of all final goods and services produced within a country in a given period of time.

In a simple circular-flow diagram, households buy goods and services wit the income they get from

all of the above are correct

Most goods and services produced at home

and most goods and services produced illegally are excluded from GDP

Expenditures on a nation's domestic production

are equal to its domestic production

GDP per person tells us the income and expenditure of the

average person in the economy

According to the circular-flow diagram GDP

can be computed as the total income paid by firms or as expenditures on final goods and services.

The basic tools of supply and demand are

central to macroeconomic analysis as well as to microeconomics analysis.

Real GDP is the Yearly production of final goods and services valued at

constant prices

Real GDP is the yearly production of final goods and services valued at

constant prices

In the national income accounts, depreciation is called

consumption of fixed capital

Retained earnings is income that

corporations have earned but have not paid out to their owners.

If total spending rises from one year to the next, then

either the economy must be producing a larger output of goods and services, or goods and services must be selling at higher prices, or both

Net exports equal

exports minus imports

Recessions are not associated with which of the following

falling unemployment

Government purchases include spending on goods and services by

federal, state, and local governments

The term economists use to describe a situation in which the economy's overall price level is rising is

inflation

Income generated by a nation's domestic production

is equal to is domestic production

Much of macroeconomics attempts to explain

long-run growth and short-run fluctuations in real GDP

The GDP Deflator is the ratio of

nominal GDP to real GDP multiplied by 100

Changes in the GDP deflator reflect

only changes in prices

The inflation rate is the

percentage change in the price level from one period to another.

The Income that households and non corporate businesses receive is called

personal income

Which government entity computes U.S GDP every three months?

the department of commerce

Total income from domestic production of final goods and services equal

the expenditures for these goods whoever buys them.

The percentage change in the price level from one period to another is called

the inflation rate

National income is defined as

the total income earned by a nation's permanent residents in the production of goods and services

A form of government spending that is not made in exchange for currently produced good or services is called

transfer payment