Exam 19: Gdp: Measuring Total Production and Income

Emily is a writer, and uses her tablet computer to write a 500-page novel that she sells to a publishing company for $500,000. If the publisher prints 1 million copies that sell for $25 each, what is the contribution to GDP of Emily's novel?

If an increase in crime causes households to spend money on police and security systems, GDP will rise.

The underground economy-the informal sector-can be a significant drag on the economies of developing countries. Why are firms in the informal sector often less efficient than firms in the formal sector?

Suppose Bob works for Mary as a proofreader. Mary and Bob fall deeply in love, marry, and have eight children. Bob stops working for Mary in order to care for the children. What will be the effect on GDP?

The "underground economy" refers to

Which of the following transactions would be included in the official calculation of GDP?

If a German firm produces cars in the United States, that production should count towards

The size of the underground economy as a percent of GDP is larger in the United States as compared to poorer countries such as Zimbabwe.

The values of real GDP and real GNP are almost the same in countries where a significant fraction of domestic production takes place in foreign-owned firms.

Marla is an architect who is designing a home for Chuck. Chuck is paying Marla $150 per hour to design his new home. When Chuck and Marla get married, Marla continues to work on designing the home, but she no longer charges Chuck for her work. As a result, GDP ________ because ________.

Table 19-28 -Refer to Table 19-28. Based on the table above, what is national income for this economy?

Scott is a woodworker and charges $125 an hour for his time manufacturing custom-made wood products. For his wife's birthday, he designs and creates an intricate birdseye maple jewelry box that takes him 15 hours to complete. By how much and in what direction does GDP change as a result of his efforts?

High-income countries such as the United States spend a greater amount on services as compared to goods.

Assuming that the United States is the domestic economy, ________ are goods and services produced by ________ and purchased by ________.

Table 19-12 -Refer to Table 19-12. Consider the following data on nominal GDP and real GDP (values are in billions of dollars): The base year used in calculating real GDP is

In the first half of 2017, automobile sales in the United States were lower than they were in the first half of 2016. The decrease in auto sales impacts GDP because new automobiles are counted as ________ when purchased by households and ________ when purchased by businesses.

Table 19-15 -Refer to Table 19-15. Consider the following data on nominal GDP and real GDP (values are in billions of dollars): The GDP deflator for 2017 equals

Investment, as defined by economists, would include the purchase of a

Which of the following is included in gross domestic product for an economy in a given year?

Table 19-25 -Refer to Table 19-25. Given the information above, calculate the GDP deflator for both 2017 and 2018. What does the value of the deflator in the year 2017 tell you about that year with respect to the base year? What happened to prices in 2018 as compared to 2017?