Measuring Output and Income: Quiz

Use the following table to answer the next question. The following national income data for an economy is in billions of dollars. Net foreign factor income: $8 Corporate profits: 47 Gross private domestic investment: 73 Proprietors' income: 46 Dividends: 13 Consumption of fixed capital: 41 Social Security contributions: 10 U.S. exports: 23 Government purchases: 97 Personal consumption expenditures: 314 Transfer payments: 27 Imports of the U.S.: 24 Personal taxes: 46 Corporate income taxes: 23 Taxes on production and imports: 50 Interest: 16 Undistributed corporate profits: 11 Statistical discrepancy: 66 Gross domestic product in this economy is

$ 483 billion GDP is the sum of personal consumption expenditure (314), gross private domestic investment (46), government purchases (97), and net exports (23-24) GDP= 314 + 46 + 97+ 23 - 24= $483 billion

Answer the next question on the basis of the following information: 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. Nominal GDP in the current year is

$115

The total volume of business sales in our economy is several times larger than GDP because

GDP excludes intermediate transactions.

Compared to last year, the exports for a small country have increased by $4 million and the imports have decreased by $4 million. If no other line items for GDP change, how will GDP change based on the events above?

GDP will increase by $8 million.

Government Purchases: $15 Personal Consumption: 90 Gross Investment: 29 Consumption of Fixed Capital (depreciation): 5 Exports: 8 Imports:12 Refer to the accompanying data (all figures in billions of dollars). GDP is

GDP= C + I + G + X - IM 90+ 29+ 5+ 8-12 $ 130

The purchase of a computer by a person for household use would be counted in what category of GDP?

The purchase is always counted as consumption.

Use the following table to answer the next question. Year 2008 2009 2010 2011 Real GDP $20,000 40,000 60,000 70,000 Population 200 400 400 500 In 2009, real GDP per capita equals

100 GDP per captia = Real GDP/popultion 40000/400

Year 1 2 3 Nominal GDP 5,200 5,600 5,900 Real GDP 4,800 5,000 5,100 Refer to the table. GDP figures are in billions of dollars. What is the GDP price index in Year 1?

108.30

Which of the following answer choices best describes a consumption expenditure category in the national income accounting?

automobiles for personal use, but not newly constructed houses

The horizontal axis is labeled time and the vertical axis is labeled nominal and real GDP in dollars. An S-shaped curve is labeled nominal GDP and intersects the real GDP curve at time equals 2000. The year 2000 must be the

base year of the GDP price index.

Assume the total real output of a developing country increases from $8 billion to $8.2 billion while its population expands from 14 to 15 million people from one year to the next. Over the year, real GDP per capita has

decreased by $25 per person

Which of the following activities is excluded from GDP, causing GDP to understate a nation's production?

goods and services produced in the underground economy

Answer the question below based on the following price and output data over a five-year period for an economy that produces only one good. Assume that year 2 is the base year. Year 1 2 3 4 5 Units of Output 8 10 15 18 20 Price per Unit $2 3 4 5 6 For the years shown, the growth ofterm-2

nominal GDP overstates increases in real output.

Which of the following is not an example of a final good or service (from the perspective of the national income accounts)?

seedlings and saplings purchased for resale by Wendy's Garden Center