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Exam 7: Measuring Domestic Output and National Income

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Question 111

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The two ways of looking at GDP are the

A) output approach and expenditures approach.
B) income approach and saving approach.
C) expenditures approach and income approach.
D) output approach and consumption approach.

E) A) and D)
F) A) and B)

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Question 112

Multiple Choice

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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.

E) A) and C)
F) C) and D)

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Question 113

Multiple Choice

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By summing the dollar value of all monetary transactions in the economy, we would

$\begin{array} { | c | c | c | } \hline \text { Year } & \text { Units of Output } & \text { Price Per Unit } \\\hline 1 & 3 & \$ 3 \\\hline 2 & 4 & 4 \\\hline 3 & 6 & 5 \\\hline 4 & 7 & 7 \\\hline 5 & 8 & 8 \\\hline\end{array}$ Assume an economy that makes only one product and that year 3 is the base year. Output and price data for a ?ve-year period are shown in the table. Real GDP for year 5 is

$\begin{array} { | l | r | } \hline \text { Gross Private Domestic Investment } & \$ 46 \\\hline \text { Exports of the U.S. } & 9 \\\hline \text { Disposable Income } & 190 \\\hline \text { Personal Saving } & 10 \\\hline \text { Government Purchases } & 84 \\\hline \text { Net Foreign Factor Income } & 10 \\\hline \text { Consumption of Fixed Capital } & 52 \\\hline \text { Dividends } & 13 \\\hline \text { Imports of the U.S. } & 12 \\\hline \text { Taxes on Production and Imports } & 22 \\\hline \text { Personal Taxes } & 38 \\\hline \text { Social Security Contributions } & 23 \\\hline \text { Statistical Discrepancy } & 0 \\\hline\end{array}$ Refer to the accompanying data. All ?gures are in billions of dollars. The gross domestic product is

The following are national income account data for a hypothetical economy in billions of dollars: gross private domestic investment ($320) , imports ($35) , exports ($22) , personal consumption Expenditures ($2,460) , and government purchases ($470) . What is GDP in this economy?

If the per-unit prices of the three goods were each $1 in a base year used to construct a GDP price index, then the GDP price index in the current year is

Which of the following is not economic investment?

Government purchases include government spending on

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

$\begin{array} { | l | r | } \hline \text { Gross Investment } & \$ 18 \\\hline \text { National Income } & 100 \\\hline \text { Net Exports } & 2 \\\hline \text { Personal Income } & 85 \\\hline \text { Personal Consumption Expenditures } & 70 \\\hline \text { Saving } & 5 \\\hline \text { Government Purchases } & 20 \\\hline \text { Net Domestic Product } & 105 \\\hline \text { Statistical Discrepancy } & 0 \\\hline\end{array}$ Refer to the accompanying data (all ?gures in billions of dollars) . The gross domestic product for this economy is

The expenditures or output approach to GDP measures it by summing up

In the expenditures approach of national income accounting, C, Ig, and G include expenditures for

$\begin{array} { | c | c | c | } \hline \text { Year } & \text { Units of Output } & \text { Price Per Unit } \\\hline 1 & 20 & \$ 4 \\\hline 2 & 25 & 4 \\\hline 3 & 30 & 6 \\\hline\end{array}$ Assume an economy that is producing only one product. Output and price data for a three-year period are shown in the table. If year 2 is chosen for the base year, in year 3 nominal GDP and real GDP, respectively, are

The largest component of national income is

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

$\begin{array} { | l | c | } \hline \text { Personal Taxes } & \$ 40 \\\hline \text { Social Security Contributions } & 15 \\\hline \text { Taxes on Production and Imports } & 20 \\\hline \text { Corporate Income Taxes } & 40 \\\hline \text { Transfer Payments } & 22 \\\hline \text { U.S. Exports } & 24 \\\hline \text { Undistributed Corporate Profits } & 35 \\\hline \text { Government Purchases } & 90 \\\hline \text { Gross Private Domestic Investment } & 75 \\\hline \text { U.S. Imports } & 22 \\\hline \text { Personal Consumption Expenditures } & 250 \\\hline \text { Consumption of Fixed Capital (depreciation) } & 25 \\\hline \text { Net Foreign Factor Income } & 10 \\\hline \text { Statistical Discrepancy } & 0 \\\hline\end{array}$ Refer to the accompanying data (all ?gures in billions of dollars) . GDP is

NDP can be determined by adding taxes on production and imports to GDP.

Which of the following is an intermediate good?

$\begin{array} { | l | c | } \hline \text { Gross Private Domestic Investment } & \$ 46 \\\hline \text { Exports of the U.S. } & 9 \\\hline \text { Disposable Income } & 190 \\\hline \text { Personal Saving } & 10 \\\hline \text { Government Purchases } & 84 \\\hline \text { Net Foreign Factor Income } & 10 \\\hline \text { Consumption of Fixed Capital } & 52 \\\hline \text { Dividends } & 13 \\\hline \text { Imports of the U.S. } & 12 \\\hline \text { Taxes on Production and Imports } & 22 \\\hline \text { Personal Taxes } & 38 \\\hline \text { Social Security Contributions } & 23 \\\hline \text { Statistical Discrepancy } & 0 \\\hline\end{array}$ Refer to the accompanying data. All ?gures are in billions of dollars. The national income is