chapter 8 example #73223

The flow of gross domestic product during a given interval must always be equivalent to the flow of gross domestic income within that same period because

According to the circular flow of income and​ output, which of the following is not​ true?

Total income can be viewed as the sum of

Total income equals the dollar value of total output because

In the circular flow of income

For a​ business, profit is a cost of production.

Total income is the annual cost of producing the entire output of final goods and services.

In product​ markets,

The dollar value of total output is always equal to total income.

In the circular flow model of income and​ output, households sell ______________ services to businesses that pay for those services. The receipt of payments is total ____________. Businesses sell goods and services to households that pay for them. The dollar value of total output is equal to the total monetary value of all ______________ goods and services produced. The dollar value of final output must always equal total income. The variable that adjusts to make this so is known as ______________.

A woman who makes a living charging for investment advice on her Internet Web site marries one of her​ clients, to whom she now provides advice at no charge. As a result of​ this, GDP ____________.

A tennis player wins two top professional tournaments as an unpaid​ amateur, meaning the tournament sponsor does not have to pay out his share of prize money. As a result of​ this, GDP ______________.

A company that had been selling used firearms illegally finally gets around to obtaining an operating license and performing background checks as specified by law prior to each gun sale. As a result of​ this, GDP __________________.

The manufacturer purchases a chip in June

Then the manufacturer uses it as a component in a computer in August

Finally, the company sells the computer to a customer in November.

A retail outlet of the company sells a computer manufactured during the current year.

A marketing arm of the company receives fee income during the current year when a buyer of one of its computers elects to use the computer manufacturer as her Internet service provider.

Which of the following statements is not true about the use of GDP as a measure of national​ welfare?

Gross Domestic Product

Gross domestic product is defined as

GDP counts intermediate goods because to not do so would result in GDP being undervalued.

All of the following transactions are excluded from the measure of GDP except

Which of the following statements is​ correct?

___________________ is the total market value of final goods and services produced in an economy during a​ one-year period by factors of production within the​ nation's borders. It represents the dollar value of the flow of final production over a​ one-year period.

To avoid double​ counting, we look only at final goods and services produced​ or, equivalently, at _______________.

In measuring​ GDP, we must __________________ (1) purely financial​ transactions, such as the buying and selling of​ securities; (2) government transfer payments and private transfer​ payments; and​ (3) the transfer of secondhand goods.

Many other transactions are excluded from measured _______________, among them household services rendered by​ homemakers, underground economy​ transactions, and illegal economic​ activities, even though many of these result in the production of final goods and services.

GDP is a useful measure for tracking changes in the __________________ of overall economic activity over​ time, but it is not a measure of the​ well-being of a​ nation's residents because it fails to account for nonmarket​ transactions, the amount and quality of leisure​ time, environmental or safety​ issues, labor market​ discrimination, and other factors that influence general welfare.

The expenditure approach to tabulating GDP

The largest component of GDP by far is

If a household purchases a new car and a new​ refrigerator, this would be classified as spending on

The biggest component of GDP using the expenditure approach is​ ____________ and the biggest component of GDP using the income approach is​ _____________.

To derive GDP using the expenditure​ approach, which of the following components are added​ together?

Which of the following equations is​ correct?

Gross domestic income​ (GDI) is identical to gross domestic product​ (GDP).

Which of the following equations is used to calculate gross domestic income​ (GDI)?

To derive GDP using the income​ approach, we add up all factor​ payments, including ______________, ____________, _____________, and _________.

To get an accurate measure of GDP using the income​ approach, we must also add ___________________ and ______________ to those total factor payments.