Exam 12: Gdp: Measuring Total Production and Income

Table 12-27 National income \ 1,000 Retained earnings not paid as dividends 50 Transfer payments 40 Interest on government bonds 20 Personal taxes 30 The components of national income for an economy are represented in Table 12-27 above.All values are in billions of dollars. -Refer to Table 12-27.What is the level of disposable personal income for this economy?

In a small economy,gross investment in 2013 is $1,500,consumption spending is $6,000,net investment is $200,government spending is $1,500,exports are $2,000 and imports are $1,000.What is GDP for this economy in 2013?

How can a firm have a negative valued added,as supposedly some state-owned businesses did in the former Soviet Union? What has to be true for value added to be negative?

The sum of the value added of every firm involved in producing all final goods and services ________ gross domestic product.

Give two reasons why GDP does not reflect total production in an economy.

The circular flow of income shows that GDP can be measured as the sum of wages,interest,rent,and profits received by households or total expenditures on goods and services by households,firms,government,and the rest of the world.