Ch 7 Flashcards
Gross domestic product measures and reports output
In dollar amounts
The agency responsible for compiling the national income product accounts for the US economy is the
Bureau of economic analysis
Value added refers to
The difference between the value of a firms output and the value of the inputs that it has purchased from others
If depreciation (consumption of fixed capitals) exceeds gross domestic investment, we can conclude that
Net investment is negative
Which the following is not economic investment
The purchase of 100 shares of AT&T by a retired business executive
The smallest component of aggregate spending in the US is
Net exports
Real GDP measures
Current output at base years prices
If real GDP falls from one period o another, we can conclude that
None of these necessarily occurred
If real disposable income fell during a particular here we can conclude that
None of these necessarily occurred
in an economy experiencing a persistently falling price level
Changes in nominal GDP understate changes in real GDP
In determining real GDP, economist Adjust nominal GDP by using the
GDP price index
Environmental pollution is accounted for in
None of these
Within the circular flow model, the level of total resource income and total spending on output will be approximately equal true or false
True
Gross private domestic investment exceeds depreciation in an economy that experiences expanding production capacity true or false
True
The purchase of Walmart stock is a part of growth investment, but not of net investment true or false
False
A nation’s gross domestic product
Can be found by summing C plus I plus G plus X
Suppose that 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
GDP in 2010 is 500 billion
Arthur’s sounds $100 worth of cotton to Bob. Bob turns the continent o’clock, which he sells to Camille for 300. Camille uses the clock to make prom dresses that she sells to Danita for $700 Denita sells the dresses for $1200 to kids attending the prom. The total contribution to GDP of the series of transactions is
$1200
Which of the following transactions would be included in GDP
Peter buys a newly constructed house
National income accounting, consumption expenditures include
Consumer durable goods, consumer nondurable goods, and services
Supposed that GDP was 200 billion in one year and that all other components of expenditures remain the same and your two except for the business inventories increased by 10 billion GDP in year two is
210 billion
What is the difference between national income and personal income
National income represents income earned by American-owned resources, while personal income measures received income, whether earned or unearned
If nominal GDP rises then
Real GDP may either rise or fall
If real GDP rises and the GDP price index has increased
Nominal GDP must have increased
The growth of GDP may understate changes in the economy’s economic well-being over time if the
Quality of products and services improves
Assume that the size of the underground economy increases both absolutely relatively over time. As a result
GDP will tend to increasingly understate the level of output through time
When making a capital stock and reservoir analogy, the
Inflow from the river is gross investment
Which of the following is a source of data for the investment component of US GDP
The consensus Bureau’s housing starts survey and housing sales survey
True or false real GDP accounts for changes in product quality; nominal GDP does not
False
