Exam 23: Measuring a Nations Income

Which of the following correctly orders U.S.income measures from largest to smallest?

A steel company sells some steel to a bicycle company for $150.The bicycle company uses the steel to produce a bicycle,which it sells for $250.Taken together,these two transactions contribute

For an economy as a whole,income must exceed expenditure.

The GDP deflator is the ratio of

New home construction is included in the consumption component of GDP.

In the economy of Ukzten in 2010,consumption was 60% of GDP,government purchases were $212,imports were $67 and 67% of the value of exports,investment was one-half of the value of consumption.What was Ukzten's GDP in 2010?

While GDP includes tangible goods such as books and bug spray,it excludes intangible services such as the services provided by teachers and exterminators.

Suppose an economy produces only burgers and bags of fries.In 2010,4000 burgers are sold at $3 each and 6000 bags of fires are sold at $1.50 each.In 2008,the base year,burgers sold for $2.50 each and bags of fries sold for $2 each.

Table 10-4 The country of Caspir produces only cereal and milk.Quantities and prices of these goods for the last several years are shown below.The base year is 2008. Prices and Quantities -Refer to Table 10-4.In 2010,this country's

Estimates of the values of which of the following non-market goods or services are included in GDP?

Disposable personal income is the income that households and noncorporate businesses have left after satisfying all their obligations to the government.

The overall effect of accounting for purchases of foreign goods in GDP reduces GDP.

Suppose an economy's production consists only of corn and soybeans.In 2010,20 bushels of corn are sold at $4 per bushel and 10 bushels of soybeans are sold at $2 per bushel.In 2009,the price of corn was $2 per bushel and the price of soybeans was $1 per bushel.Using 2009 as the base year,it follows that,for 2010,

Consider two items that might be included in GDP: (1)the estimated rental value of owner-occupied housing and (2)purchases of newly-constructed homes.How are these two items accounted for when GDP is calculated?

U.S.real GDP is substantially higher today than it was 60 years ago.What does this tell us,and what does it not tell us,about the well-being of U.S.residents?

The government purchases component of GDP includes salaries paid to soldiers but not Social Security benefits paid to the elderly.

Consider two cars manufactured by Chevrolet in 2009.During 2009,Chevrolet sells one of the two cars to Sean for $24,000.Later in the same year,Sean sells the car to Kati for $19,000.The second automobile,with a market value of $30,000,is unsold at the end of 2010 and it remains in Chevrolet's inventory.The transactions just described contribute how much to GDP for 2009?

The U.S.Air Force pays a Turkish citizen $30,000 to work on a U.S.base in Turkey.As a result,

GDP is the market value of all final goods and services produced within a country in a given period of time.

Table 23-1 The country of Batavia produces only chocolates and watches.Below is a table with recent information on Batavia production and prices.The base year is 2009. Prices and Quantities -Refer to Table 23-1. What was the inflation rate for 2010? Show your work.