Exam 23: Measuring a Nation S Income

Table 23-3 The table below contains data for the country of Crete for the year 2010. -Refer to Table 23-3. What was Crete's investment in 2010?

Michigan Cranberry Company sold $10 million worth of cranberries it produced. In producing cranberries, it purchased $1 million dollars worth of supplies from foreign countries and paid workers who reside in Canada but commute to the U.S. $1 million. How much did these transactions add to U.S. GDP?

In a simple circular-flow diagram, households buy goods and services with the income they get from

Identify the largest and smallest components of GDP.

Suppose that twenty-five years ago a country had nominal GDP of $1,000, a GDP deflator of 200, and a population of 100. Today it has nominal GDP of $3,000, a GDP deflator of 400, and population of 150. What happened to the real GDP per person?

The government computes measures of income other than GDP because these other measures usually tell different stories about overall economic conditions.

Transfer payments are

GDP is defined as the market value of all final goods and services produced within a country in a given period of time. In spite of this definition, some production is left out of GDP. Explain why some final goods and services are not included.

Which of the following is a way to compute GDP?

Which of the following is not included in GDP?

Which of the following topics are more likely to be studied by a macroeconomist than by a microeconomist?

Identify the immediate effect of each of the following events on U.S. GDP and its components. a.James receives a Social Security check. b.John buys an Italian sports car. c.Henry buys domestically produced tools for his construction company.

If foreign citizens earn less income in the U.S. than U.S. citizens earn in foreign countries,

If the prices of all goods and services produced in the economy rose while the quantity of all goods and services stayed the same, which would rise?

Tom is an organic gardener. For several years, he produced only for his own consumption. Last year, he sold his vegetables at a farmer's market. This year, he sold all of his vegetables to a company producing organic vegetable soup. When is the value of Tom's vegetables included in GDP?

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

For monitoring fluctuations in the national economy, which measure of income is best?

For an economy as a whole,

If a state made a previously-illegal activity, such as gambling or prostitution, legal, then, other things equal, GDP

In 2011 a country had a real GDP of $13.89 trillion and GDP deflator of 110. In 2012 it had a nominal GDP of $17.8 trillion and real GDP of 14.24 trillion. What is the rate of inflation in 2012?