ECON Chap 7 PT 2

Which of the following is a final good or service? A. a haircut purchased by a father for his 12-year-old son B. fertilizer purchased by a farm supplier C.diesel fuel bought for a delivery truck D.Chevrolet windows purchased by a General Motors assembly plant

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

Net exports are negative when: A. a nation's imports exceed its exports. B. the economy's stock of capital goods is declining. C.depreciation exceeds domestic investment. D.a nation's exports exceed its imports.

A. a nation's imports exceed its exports.

If intermediate goods and services were included in GDP, A. the GDP would be overstated. B. the GDP would then have to be deflated for changes in the price level. C. nominal GDP would exceed real GDP. D.the GDP would be understated.

A. the GDP would be overstated.

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 A. $110 B. $30 C. $40 D. $70

B. $30

If depreciation (consumption of fixed capital) exceeds gross domestic investment, we can conclude that A. nominal GDP is rising but real GDP is declining. B.net investment is negative. C.the economy is importing more than it exports. D.the economy's production capacity is expanding

B. net investment is negative

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

Bureau of Economic Analysis.

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

Consumption

Suppose that GDP was $200 billion in year 1 and that all other components of expenditures remained the same in year 2 except that business inventories increased by $10 billion. GDP in year 2 is A. $180 billion. B.$190 billion. C.$200 billion. D.$210 billion.

D. $210 billion.

GDP can be calculated by summing:

consumption, investment, government purchases, and net exports

Net exports are:

exports less imports

A nation's gross domestic product (GDP):

is the dollar value of all final output produced within the borders of the nation during a specific period of time.

GDP is the

monetary value of all final goods and services produced within the borders of a nation in a particular year.

Value added refers to

the difference between the value of a firm's output and the value of the inputs it has purchased from others.

The concept of net domestic investment refers to

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