Exam 18: Measuring the Production, Income, and Spending of Nations

The chain-weighted price index measures the price of a fixed collection of goods and services, often referred to as a "market basket," relative to some base year.

Exhibit 18-2 -An individual who purchases a computer later decides to acquire a new motherboard. In terms of computing GDP, this new motherboard would be a(n)

Inventory investment is included as a spending item when computing GDP because

Exhibit 18-5 -Using 2016 prices, according to the data in Exhibit 18-5, production in 2017 equaled

A measure of the amount of resources a country has available for investment, either in its own country or abroad, is known as

GDP is a perfect measure of production because the government is able to account for all production of goods and services over the course of the year.

Which of the following statements is true?

Intermediate goods that go directly into a manufactured product are counted as investment.

To measure GDP using the production approach, it is necessary to add up the total value of the new goods and services produced in the economy for the given time period.

Which of the following statements is true?

GDP can be calculated by adding the value of

In a hypothetical economy, a market basket consists of one laptop and two DVD players. In the base year, 2010, the price of a DVD player was $200, and the price of a laptop was $500. In 2015, the price of a DVD player was $380, and the price of a laptop was $750. The CPI for 2010 was

The numbers one finds when one measures the GDP of the United States are quite large, measured in trillions. How many billions constitute a trillion?

Determine in which spending category, if any, each of the following transactions would be recorded.

For a hypothetical economy in a given year, GDP equaled $1,170, consumption equaled $482, investment equaled $286, goods exported equaled $198, and goods imported equaled $57. What did government spending equal?

The CPI is a measure of

You buy a shirt made in Vietnam. This causes consumption spending to increase by the value of the shirt, import spending to increase by the value of the shirt, and hence GDP to increase.

A measure of production that corrects for inflation is

National saving is defined as

A rise in nominal GDP indicates that output has increased.