Study Questions for Final

Nominal GDP

The value of final output produced in a given period, measured in current prices, is

The final sale of a brand new Cadillac.

Which of the following is directly included in the calculation of GDP?

Is equal to a nation’s GDP divided by its population.

GDP per capita

Productive but excluded from GDP because it is a nonmarket activity.

When an individual makes repairs to his/her own home instead of hiring a company to make the repairs, the activity is

Chipsets produced by U.S.-owned firms operating in China.

Which of the following would be included in U.S. GNP but not in U.S. GDP?

Goods producd by U.S. firms located in foreign countries.

Which of the following is treated differently in computations of GNP as compared with GDP?

1980

The base year for calculation of real GDP for the hypothetical economy in Figure 5.2 is closest to

The money you pay a private tutor who wors for Tutors Inc

All of the following count as unreported income except

The value of lawn mowing provided by a teenager for his own family.

Which of the following is excluded from calculations of GDP?

Tips earned by a bartender who does not report them to the IRS.

Which of the following would not be included in the calculation of GDP?

C + I + G + (X - M)

A nation’s GDP is

payment of Social Security benefits

Which of the following does not represent an example of government spending?

Only the value of final goods.

To avoid counting the same output more than once, the calculation of GDP includes

Remain unchanged.

Suppose you volunteer to help clean up your neighborhood, and the only payment you receive is the sense of goodwill that develops with your neighbors. Your efforts cause the GDP of the economy to

Paper purchased by a textbook company.

Which of the following is not a final good or service?

Make international comparisons of the standard of living.

The GDP per capita is the most practical way to

Nominal GDP may change simply because of price changes over time.

Real GDP is more accurate than nominal GDP in making comparisons of output over time because

GDP measures output within the nation’s borders only.

Which of the following statements is correct concerning GDP and GNP?

Value of final output produced in a given period, adjusted for changing prices.

Real GDP is the

Intermediate good

A furniture factory produces dining room sets. The lumber it purchases from the lumberyard is a/an

An increase in the average level of prices of goods and services.

Inflation is

GDP will decrease.

Ceteris paribus, if imports increase in any given year,

Goods and services sold to international buyers

Exports are

Households

Which of the following typically purchases the most goods and services in the U.S. economy?

Federal, state, and local government spending on goods and services only.

Which of the following types of government spending is included in the calculation of GDP?

Imports

Good and services purchased from international sources are

Real GDP

To measure an economy's output adjusted for changes in the price level, one would use

Depreciation

The wearing out of plants and equipment is known as

An increase in business inventories.

Which of the following is investment, according to an economist?

$6,810 billion

On the basis of Table 5.1, gross domestic product is

Personal income

"Income received by households before payment of personal taxes" is known as

Savings

The part of disposable income not spent on current consumption is

C + I + G + (X - M)

The components of GDP are

The income earned by the factors of production in producing GDP.

National income is a measure of

The value of exports minus the value of imports.

Net exports are

Interest

Which of the following is a component included in the measure of GDP, according to the income approach?

Business investment

Businesses return purchasing power to the circular flow in the form of

A retirement portfolio of stocks and bonds.

The economic definition of investment includes all of the following except

Personal medical services

Which of the following expenditures are included in consumption?

Subtracting depreciation from GDP

Net domestic product (NDP) is determined