Exam 3: Measuring a Nations Well-Being

Nominal GDP employs current prices to value output while real GDP employs constant base-year prices to value output.

GDP per person tells us the income and expenditure of the

Gross Domestic Product can be measured as the sum of

Suppose that an economy produces 40,000 units of good A which sells at R76 a unit and 20,000 units of good B which sells at R95 per unit.Production of good A contributes

An example of a transfer payment is

A country with a larger GDP per person generally has a greater standard of living or quality of life than a country with a smaller GDP per person.

In the circular-flow diagram, payments for labour, land, and capital flow from firms to households through the markets for the factors of production.

In Europe, 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 Europeans?

Changes in the GDP deflator reflect only changes in the prices of goods and services.

The production of an apple contributes more to GDP than the production of a gold ring because food is necessary for life itself.

For an economy as a whole, income equals expenditure because the income of the seller must be equal to the expenditure of the buyer.

The table below contains data for country A for the year 2014. Household purchases of durable goods 1293 Household purchases of nondurable goods 1717 Household purchases of services 301 Household purchases of new housing 704 Purchases of capital equipment 310 Inventory changes 374 Purchases of new structures 611 Depreciation 117 Salaries of government workers 1422 Government expenditures on public works 553 Transfer payments 777 Foreign purchases of domestically produced goods 88 Domestic purchases of foreign goods 120 In 2014 what was country A's: a) GDP in 2010 b) Consumption c) Investment d) Government purchases e) Exports f) Imports g) Net exports

Which of the following would be counted in SA's GDP?

Explain why it is the case that the value of intermediate goods produced and sold during the year is not included directly as part of GDP, but the value of intermediate goods produced and not sold is included directly as part of GDP.

In producing a sweater, a man who shears sheep pays a farmer R76 for a sheep's wool.The shearing shop sells the wool to a knitting mill for r₁33.The knitting mill makes it into a fine fabric and sells it to a sweater-making firm for R247.The sweater-making firm sells the sweater to a clothing store for R380, and the clothing store sells the sweater, gift wrapped, for R950.What is the contribution to GDP of the production and sale of the sweater?

Figure 1 Year Price of pens Quantity of pens Price of books Quantity of books 2013 R57 100 R190 50 2014 R57 120 R228 70 2015 R76 120 R266 70 -Refer to FigurE?.What is the approximate percentage increase in prices from 2014 to 2015?

GDP would include which of the following?

Suppose that population grows by 2 per cent.For the standard of living to rise, which of the following must occur?

Suppose the government passes a law eliminating public holidays, resulting in increased production of goods and services.Based on this scenario, which of the following statements is correct?

GDP does not make adjustments for leisure time, environmental quality, or volunteer work.