Chapter 26

In 2010, real GDP was 13.2 trillion and nominal GDP was 14.6 trillion. Based on the GDP deflator, prices in 2010 were about blank and then prices in 2005

10.6% higher

Growth and nominal GDP overtime can be caused by

An increase in both prices and production overtime

Which of the four towns in this table has the highest standard of living

town b

Which of the following is not considered a government purchase

unemployment checks

In the past 100 years, there has been a decline in the use of unpaid child labor on the family farms. Therefore

changes in GDP overstate the true increase in production over the past 100 years.

Tim buys a house from Betty in 2011 for 200,000. Betty receives 185,000 and 15,000 goes to Mary, the real estate agent. Betty originally purchased the house in 2007 for 240,000. What value is added to GDP in 2011 for this transaction

15,000

Real GDP for the year 2000 (measured in 2005 dollars) is equal to

2005 prices × 2000 quantities.

Consider a country that produces only wheat and corn. Based on the data in the table, the growth rate of nominal GDP for 2005 2006 is:

27%

Suppose an economy produces only the four goods listed in this table. All of the countries tomatoes are used in this production of pizzas. What is the GDP in this country?

7200

Suppose an economy produces only the for goods listed in the table. what is the GDP of this country

7700

Consider a country that produces only wheat and corn. Based on the data in the table, the growth write a real GDP from 2007 to 2008 (in 2005 dollars) is

8.3%

Which of these transactions occurring in 2011 will contribute to the GDP for 2011

Boeing sells a 787 aircraft produced in 2011 to Korean airline

GDP includes the

Current market value of government purchases of goods and services

Using the national spending approach to measure GDP, the Social Security checks the government sends retirees each month get included in GDP as part of

Nothing they are not included as part of the GDP

Which of the following statements is true about GDP

GDP does not account for the distribution of income in a country.

Which of the following is true in the calculation of GDP

GDP does not include goods and services produced privately inside the home.

In nations that have large underground, or illegal, sectors:

GDP will underestimate total production in the economy

If 2009 prices are used in the calculation of real GDP and inflation occurs between 2009 and 2010, then nominal GDP will be blank real GDP in 2010

Greater than

Suppose you spent 10,000 in 2010 remodeling your house, which you originally built for 200,000 in 2000 as a result, GDP in 2010 would

Increase by 10,000

Set set of tires installed on a vehicle in an automobile factory is counted as

Intermediate good and it's market price is not part of the GDP

Which of the following activities is counted as part of US GDP

Jeff stays in a hotel in Colorado while on a skiing trip.

The value of a country's GDP exceeds that of the country's GNP if the value of the

Output produced by foreign workers in the country exceed the value of the output produced by the country's permanent residence in other countries

Orrin mines iron ore, which he sells to Thorin, who turns iron or into steel. The steel is sold to gorin, who turns the steel into battle axes. The battle axes are sold by merchant in the city to adventurers. Which of the following would be considered a final good

The battle axes sold to the adventures

Which of the following would be included in the GDP for the United States

Toyota, a Japanese car company, producing cars in the United State's

Gross domestic product is the market value of all

final goods and services produced within a country in a year.

To avoid double accounting, the value of

final goods only are included in GDP.

Imagine the Jack and Jill buy $500 worth of milk and $200 worth of crayons and coloring books each year for use in their daycare business. Jack and Jill also hire a daycare attendant at the salary of 14,000 per year. If Jack and Jill sell $100,000 worth of daycare to parents each year, what is the contribution to GDP by Jack and Jill's daycare

hundred thousand

GDP is calculated by

multiplying the quantity of all goods and services by their prices and adding together the results

The value of volunteer services is:

not included in GDP, but should be because a service is produced.