Exam 2: The Measurement and Structure of the National Economy

Nominal personal consumption expenditures in the United States were $1760.4 billion in 1980 and rose to $3839.3 billion in 1990.The price index for personal consumption expenditures was 58.5 for 1980 and 92.9 for 1990,where 1992 was the base year.Calculate the percent change in real personal consumption expenditures (rounded to the nearest percentage point)in the decade.

How does chain weighting lead to a different measurement of real GDP than the methods used by the BEA prior to 1996? What are the advantages of chain weighting? What are the disadvantages?

If a local government collects taxes of $500,000,has $350,000 of government consumption expenditures,makes transfer payments of $100,000,and has no interest payments or investment,its budget would

In the country of Kwaki,people produce canoes,fish for salmon,and grow corn.In one year they produced 5000 canoes using labor and natural materials only,but sold only 4000,as the economy entered a recession.The cost of producing each canoe was $1000,but the ones that sold were priced at $1250.They fished $30 million worth of salmon.They used $3 million of the salmon as fertilizer for corn.They grew and ate $55 million of corn.What was Kwaki's GDP for the year?

If the expected inflation rate was 2.5%,the expected real interest rate was 4.0%,and the real interest rate turned out to be 5.1%,then the actual inflation rate equals

Nominal gross private domestic investment was $1888.0 billion in 2008 and rose to $2057.4 billion in 2009.The chain-weight price index for gross private domestic investment was 106.6 for 2008 and 110.3 for 2009,where 2005 was the base year.Calculate the percent change in real gross private domestic investment (rounded to the nearest percentage point)from 2008 to 2009.

Describe the three different approaches to measuring the amount of economic activity that occurs during a period of time and explain why they all give identical measurements.

The Compagnie Naturelle sells mounted butterflies,using butterfly bait it buys from another firm for $20,000.It pays its workers $35,000,pays $1000 in taxes,and has profits of $3000.What is its value added?

In a given year,a country's GDP = $9841,net factor payments from abroad = $889,taxes = $869,transfers received from the government = $296,interest payments on the government's debt = $103,consumption = $8148,and government purchases = $185.The country had private saving equal to

Private disposable income equals

Inventories include each of the following except

In 1975,Richard Petty won the NASCAR race in Richmond,earning $6265.In 2006,Dale Earnhardt,Jr.,won the race,earning $239,166.The CPI index was 52.5 in 1975 and 198.7 in 2006 (base year = 1982-1984).Calculate the real earnings (based on base year 1982-1984)of both Petty and Earnhardt.

If the nominal interest rate on a one-year loan was 7%,the expected inflation rate over the year was 3% and the actual inflation rate over the year turned out to be 3.5%,then the expected real interest rate equals

The three approaches to measuring economic activity are the

If an American construction company built a road in Kuwait,this activity would be

Because government services are not sold in markets,

By Marks buys a one-year German government bond (called a bund)for $400.He receives principal and interest totaling $436 one year later.During the year the CPI rose from 150 to 162.The nominal interest rate on the bond was ________,and the real interest rate was ________.

The nominal interest rate minus the inflation rate is the

The value of a household's assets minus the value of its liabilities is called

How are net exports,net factor payments from abroad,and the current account balance related?