Econ Chapter 6
Gross domestic income (GDI) is defined as:
the total income generated in an economy by the production of final goods and services during a particular period.
Which of the following items would NOT be a part of private investment in the computation of GDP?
An old shopping center acquired by a firm
Private investment plays a crucial role in the macroeconomy because it is:
an expenditure that adds to the economy's productive capacity.
Goods that are produced in a particular period but not sold in the current period:
are called inventories and are included in gross private investment.
(Exhibit: Circular Flow Model) The exhibit shows a simplified circular flow model where only consumption goods are being produced. The arrow marked "B" represents the flow of:
consumer goods and services.
The purchases of U.S. products by the citizens of Mexico are:
counted as U.S. exports.
(Exhibit: Circular Flow Model) The exhibit shows a simplified circular flow model where only consumption goods are being produced. The arrow marked "D" represents the flow of:
factor incomes.
(Exhibit: Circular Flow Model) The exhibit shows a simplified circular flow model where only consumption goods are being produced. The arrow marked "C" represents the flow of:
factors of production.
The value of an economy's total output of goods and services is called _____.
gross domestic product
For computing GDP, the official measure of the value of all goods produced during a period for use in the production of other goods is called:
gross private domestic investment.
Transfer payments are:
not included in GDP because they do not represent income derived from current production.
(Exhibit: Circular Flow Model) The exhibit shows a simplified circular flow model where only consumption goods are being produced. The arrow marked "A" represents the flow of:
personal consumption expenditures.
The value of goods and services purchased by households during a particular period is called:
personal consumption.
Which of the following is the best measure of a nation's standard of living?
real GDP per capita
Double counting in GDP accounting:
refers to the inclusion of both intermediate goods and final goods in GDP.
The cost of producing goods and services includes:
the cost of factors of production, depreciation, and other production-related taxes.
Government purchases are defined as:
the sum of purchases of goods and services from firms by government agencies and the total value of output produced by government agencies.
(Exhibit: Components of GDP for an Economy 2) Net exports are negative. This would mean that:
imports are larger than exports and there is a trade deficit.
GDP can be calculated by totaling either the:
market values of all final goods and services or the value added at all stages of production.
Disposable personal income is calculated as personal income:
minus taxes.