Chapter 6: Economics - National Income and GDP

1. The National Income and Product Accounts (NIPA) help economists and policymakers to:

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

The system that measures the economy's overall performance is formally known as:

A nation's gross domestic product (GDP):

A nation's gross domestic product (GDP) can be found by:

Suppose Smith pays $100 to Jones.

Suppose the total monetary value of all final goods and services produced in a particular country in 2010 is $500 billion and the total monetary value of final goods and services sold is $450 billion. We can conclude that:

National income accountants can avoid multiple counting by:

Gross domestic product (GDP) measures and reports output:

By summing the dollar value of all market transactions in the economy we would:

Final goods and services refer to:

If intermediate goods and services were included in GDP:

Which of the following is a final good or service?

Which of the following is an intermediate good?

Tom Atoe grows fruits and vegetables for home consumption. This activity is:

The value added of a firm is the market value of:

Alejandro Scoobertini owns a store specializing in soccer jerseys. In 2008, he purchased $150,000 worth of jerseys from manufacturers, employed one worker for $40,000, purchased $20,000 worth of supplies from an office supply store, and sold jerseys for $280,000. Based on this information, what was the value added at Alejandro's store in 2008?

Arthur sells $100 worth of cotton to Bob. Bob turns the cotton into cloth, which he sells to Camille for $300. Camille uses the cloth to make prom dresses that she sells to Donita for $700. Donita sells the dresses for $1200 to kids attending the prom. The total contribution to GDP of this series of transactions is:

Which of the following transactions would be included in GDP?

Value added refers to:

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:

Setup Corporation buys $100,000 of sand, rock, and cement to produce ready-mix concrete. It sells 10,000 cubic yards of concrete at $30 a cubic yard. The value added by Setup Corporation is:

Value added can be determined by:

If depreciation exceeds gross investment:

The concept of net domestic investment refers to:

If depreciation (consumption of fixed capital) exceeds gross domestic investment, we can conclude that:

When an economy's production capacity is expanding:

Economy A: gross investment equals depreciation Economy B: depreciation exceeds gross investment Economy C: gross investment exceeds depreciation Refer to the above information. Positive net investment is occurring in:

Economy A: gross investment equals depreciation Economy B: depreciation exceeds gross investment Economy C: gross investment exceeds depreciation Other things equal, the above information suggests that the production capacity in economy:

In 1933, net private domestic investment was a minus $6.0 billion. This means that:

An economy is enlarging its stock of capital goods:

If in some year gross investment was $120 billion and net investment was $65 billion, then in that year the country's capital stock:

GDP can be calculated by summing:

In national income accounting, consumption expenditures include purchases of:

In national income accounting, consumption expenditures include:

Net exports are:

Net exports are negative when:

Which of the following is not economic investment?

Which of the following do national income accountants consider to be investment?

National income accountants define investment to include:

Suppose that inventories were $40 billion in 2007 and $50 billion in 2008. In 2008, accountants would:

Suppose that inventories were $80 billion in 2007 and $70 billion in 2008. In 2008, accountants would:

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:

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 fell by $10 billion. GDP in year 2 is:

If the economy adds to its inventory of goods during some year:

The smallest component of aggregate spending in the United States is:

In calculating GDP, governmental transfer payments, such as social security or unemployment compensation, are:

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

Government purchases include government spending on:

In national income accounting, government purchases include:

Transfer payments are:

The value of U.S. imports is:

In the treatment of U.S. exports and imports, national income accountants:

In calculating the GDP national income accountants:

The ZZZ Corporation issued $25 million in new common stock in 2008. It used $18 million of the proceeds to replace obsolete equipment in its factory and $7 million to repay bank loans. As a result, investment:

In 2007, Trailblazer Bicycle Company produced a mountain bike that was delivered to a retail outlet in November of 2007. The bicycle was sold to E.Z. Ryder in March of 2008. This bicycle is counted as:

Answer the question on the basis of the following data. All figures are in billions of dollars: Government Purchases $15 Consumption 90 Gross investment 20 consumption of fixed capital 5 exports 8 imports 12 Refer to the above data. GDP is:

Answer the question on the basis of the following data. All figures are in billions of dollars: Government Purchases $15 Consumption 90 Gross investment 20 consumption of fixed capital 5 exports 8 imports 12 Refer to the above data. NDP is:

Answer the question on the basis of the following data. All figures are in billions of dollars. personal tax $40 social security contributions 15 taxes on production 20 corporate income taxes 40 transfer payments 22 U.S. exports 24 undistributed corp profits 35 gov purchases 90 gross priv. domestic invest. 75 U.S. imports 22 personal cons. expenditure 250 consumption of fixed capital 25 net foreign factor income 10 statistical discrepency 0 Refer to the above data. GDP is:

Answer the question on the basis of the following data. All figures are in billions of dollars. personal tax $40 social security contributions 15 taxes on production 20 corporate income taxes 40 transfer payments 22 U.S. exports 24 undistributed corp profits 35 gov purchases 90 gross priv. domestic invest. 75 U.S. imports 22 personal cons. expenditure 250 consumption of fixed capital 25 net foreign factor income 10 statistical discrepency 0 Refer to the above data. NDP is:

Answer the question on the basis of the following data. All figures are in billions of dollars. personal tax $40 social security contributions 15 taxes on production 20 corporate income taxes 40 transfer payments 22 U.S. exports 24 undistributed corp profits 35 gov purchases 90 gross priv. domestic invest. 75 U.S. imports 22 personal cons. expenditure 250 consumption of fixed capital 25 net foreign factor income 10 statistical discrepency 0 Refer to the above data. NI is:

Answer the question on the basis of the following data. All figures are in billions of dollars. personal tax $40 social security contributions 15 taxes on production 20 corporate income taxes 40 transfer payments 22 U.S. exports 24 undistributed corp profits 35 gov purchases 90 gross priv. domestic invest. 75 U.S. imports 22 personal cons. expenditure 250 consumption of fixed capital 25 net foreign factor income 10 statistical discrepency 0 Refer to the above data. PI is:

Answer the question on the basis of the following data. All figures are in billions of dollars. personal tax $40 social security contributions 15 taxes on production 20 corporate income taxes 40 transfer payments 22 U.S. exports 24 undistributed corp profits 35 gov purchases 90 gross priv. domestic invest. 75 U.S. imports 22 personal cons. expenditure 250 consumption of fixed capital 25 net foreign factor income 10 statistical discrepency 0 Refer to the above data. DI is:

Corporate profits are found by:

Consumption of fixed capital (depreciation) can be determined by:

If net foreign factor income is zero and there are no statistical discrepancies, the sum of national income and the consumption of fixed capital equals:

If there are no statistical discrepancies, NDP is:

Which of the following best defines national income?

The total amount of income earned by U.S. resource suppliers in a year, plus taxes on production and imports, is measured by:

The largest component of national income is:

National income measures:

If personal income exceeds national income in a particular year, we can conclude that:

Which of the following best defines disposable income?

Which of the following is the smallest dollar amount in the United States?

Transfer payments are included in:

The amount of after-tax income received by households is measured by:

In a typical year, which of the following measures of aggregate output and income is likely to be the smallest?

What is the difference between national income and personal income?

Nominal GDP is:

Real GDP refers to:

Real GDP measures:

Nominal GDP is adjusted for price changes through the use of:

In the second quarter (3-month period) of 2001, U.S. nominal GDP increased but U.S. real GDP declined. We can conclude that:

A price index is:

If real GDP falls from one period to another, we can conclude that:

If real GDP in a particular year is $80 billion and nominal GDP is $240 billion, the GDP price index for that year is:

Suppose a nation's 2010 nominal GDP was $972 billion and the general price index was 90. To make the 2010 GDP comparable with the base year GDP, the 2010 GDP must be:

Suppose nominal GDP in 2009 was $100 billion and in 2010 it was $260 billion. The general price index in 2009 was 100 and in 2010 it was 180. Between 2009 and 2010 the real GDP rose by approximately:

Historically, real GDP has increased less rapidly than nominal GDP because:

Suppose nominal GDP was $360 billion in 1990 and $450 billion in 2000. The appropriate price index (1985 = 100) was 120 in 1990 and 125 in 2000. Between 1990 and 2000 real GDP:

If nominal GDP rises:

Real GDP is:

In comparing GDP data over a period of years, a difference between nominal and real GDP may arise because:

Answer the question on the basis of the following information: Only 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. Refer to the above information. Nominal GDP in the current year is:

Answer the question on the basis of the following information: Only 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. (Advanced analysis) Refer to the above information. If the per unit prices of the three goods each were $1 in a base year used to construct a GDP price index, then the GDP price index in the current year is:

Answer the question on the basis of the following information: Only 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. Advanced analysis) Refer to the above information. If the per unit prices of the three goods each were $1 in a base year used to construct a GDP price index, then real GDP in the current year is:

Assume that in 2002 the nominal GDP was $350 billion and in 2003 it was $375 billion. On the basis of this information we:

If nominal GDP in some year is $280 and real GDP is $160, then the GDP price index for that year is:

If real disposable income fell during a particular year, we can conclude that:

In an economy experiencing a persistently falling price level:

If real GDP rises and the GDP price index has increased:

In determining real GDP, economists adjust the nominal GDP by using the:

The fact that nominal GDP has risen faster than real GDP:

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

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

A large underground economy results in an:

The GDP tends to:

GDP excludes:

The growth of GDP may understate changes in the economy's economic well-being over time if the:

Environmental pollution is accounted for in:

Assume that the size of the underground economy increases both absolutely and relatively over time. As a result:

(Consider This) When making a capital stock and reservoir analogy, the:

(Consider This) When making a capital stock and reservoir analogy, the:

(Consider This) Capital is a:

(Last Word) The U.S. government agency responsible for compiling the national income accounts is the:

(Last Word) Which of the following is a source of data for the consumption component of the U.S. GDP?

(Last Word) Which of the following is a source of data for the investment component of U.S. GDP?