Exam 5: Measuring a Nation's Production and Income

What is the fastest growing component of consumption in the United States?

As depicted in the circular flow diagram, firms

Macroeconomics differs from microeconomics in that

Personal disposable income is pre-tax income that flows directly to households.

How does real gross domestic product (GDP)differ from nominal GDP?

Depreciation is the term used when plants, equipment and housing deteriorate and wear out, thus losing their original values.

A firm's value added can be measured as the value of its

Which of the following would be a macroeconomic question?

Suppose someone told you that the chain-weighted price index for GDP in a country was 135. Why does this fact not convey much information to you?

Blu-ray disc players, iPhones, and hybrid cars are generally considered to be ________ goods.

When gross domestic product (GDP)is adjusted by adding any income earned abroad by U.S. firms or residents which is sent back to the United States and by subtracting any income earned in the United States by non-U.S. corporations or foreign nationals which is sent back to their home countries, it is called

A trade surplus occurs when

Which of the following should be included in U.S. GDP?

When there are sustained increases in real GDP over time, we say that the economy is undergoing

Prior to 1996 the government measured real GDP using 1987 prices. What would the rapid growth in computers and the fall in computer prices tend to do to the difference between true GDP growth and measured real GDP growth, relative to using a later year?

Recall the Application about the link between happiness and GDP to answer the following question(s). Comparing changes in happiness to changes in per capita income over the last 30 years, economists at Dartmouth College and Warwick University have measured levels of happiness in the United States and United Kingdom based on income levels, ethnicity, age, and gender. -This Application addresses the economic concept of

In a business cycle, the period following a trough is called an expansion.

National income is the income that individuals and firms earn from their production.

GDP measures underestimate the value of output produced by an economy because they include services not transferred through markets.

Transfer payments are excluded from government purchases in GDP accounting because