Exam 19: Gdp: Measuring Total Production and Income

Table 19-18 A very simple economy produces three goods: cameras, legal services, and books. The quantities produced and their corresponding prices for 2013 and 2018 are shown in the table above. -Refer to Table 19-18. What is real GDP in 2018, using 2013 as the base year?

In calculating gross domestic product, the Bureau of Economic Analysis uses the sum of the market value of final goods and services produced. This means that the BEA

In the term "real GDP," what does "GDP" stand for and what does it measure? What does "real" indicate?

Real GDP will increase

Table 19-11 Consider the following data for Tyrovia, a country that produces only two products: guns and butter. -Refer to Table 19-11. Real GDP for Tyrovia for 2018 using 2009 as the base year equals

An increase in national income could by caused by which of the following?

The output of Mexican citizens who work in Texas would be included in the

The values of real GDP and real GNP are almost the same for the United States.

Which of the following could cause nominal GDP to increase next year, but real GDP to decrease?

Table 19-5 Consider the table above showing three stages of production of an automobile. -Refer to Scenario 19-1. The value added of CANOES-R-US for each canoe equals

If Gladys sells her 2003 Jeep Cherokee for $3,500 in 2018, the sale of her car contributes $3,500 to 2018 GDP.

Personal income is defined as

Table 19-10 a. What is the value added by each stage of production? b. What is the total value added? For simplicity, you can ignore the cost of the inputs for oil drilling. Answer: a. The value added is the difference between the price the firm sells a good for and the price it paid other firms for the intermediate good. The firm that does the oil drilling sells the gallon of oil to the refinery for $0.75. Since we are assuming no other input costs for simplicity, the value added by the drilling firm is $0.75. The refinery processes the oil and then sells it to the transport company for $1.25. The refinery's value added is $0.50. The transport company sells the oil to the retail company for $1.85. The transport company's value added is $1.85 - $1.25 = $0.60. Finally, the retail gas station sells the gallon of gas for $3.65. The value added by the retail station is $1.80. b. The total value added is found by summing the value added by each firm involved the production of the gallon of gas. The retail price is the same at this total of value added. Diff: 2 Page Ref: 646/262 Topic: Measuring GDP by the Value Added Method *: Recurring Learning Outcome: Macro-3: Identify and interpret key macroeconomic measures AACSB: Analytical thinking 19.2 Does GDP Measure What We Want It to Measure? -The Philippines and Vietnam have roughly the same size population. Suppose the GDP of the Philippines is $1,000 billion and the GDP of Vietnam is $10,000 billion. You should conclude

When consumers are less confident about their jobs or incomes, they are more likely to

Table 19-8 -Refer to Table 19-8. Suppose that a simple economy produces only four goods and services: sweaters, CDs, sugar, and soft drinks. Assume one half of the sugar is used in making the soft drinks and the other half of the sugar is purchased by households. Calculate nominal GDP for this simple economy.

To calculate GDP by the expenditure method, one must add

Why do we not count the value of intermediate goods and services in gross domestic product? Does the value of intermediate goods and services show up in gross domestic product? If so, how?

Government spending on transfer payments is included in government purchases when calculating GDP because it results in the production of new goods and services.

Table 19-18 A very simple economy produces three goods: cameras, legal services, and books. The quantities produced and their corresponding prices for 2013 and 2018 are shown in the table above. -Refer to Table 19-18. What is real GDP in 2018, using 2018 as the base year?

Which of the following would increase GNP in the United States?