Exam 12: GDP: Measuring Total Production and Income

Table 12-26 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 12-26 above. All values are in billions of dollars. -Refer to Table 12-26.What is the level of personal income for this economy?

Even though it is generally true that the more goods and services people have,the better off they are,GDP provides only a rough measure of well-being.Assuming language is not an issue,what other factors besides GDP might you consider when deciding where to live and work?

The circular flow diagram shows that

Macroeconomics,as opposed to microeconomics,includes the study of what determines the level of

Real GDP per capita is calculated by dividing the value of real GDP for a country by the country's adult population.

If nominal GDP is $5 trillion and real GDP is $4 trillion,the GDP deflator is

National income is equal to

The GDP deflator is a measure of the price level which is calculated as nominal GDP divided by real GDP and multiplied by 100.

Table 12-11 Year Guns Produced Price of Guns Butter Produced Price of Butter 2009 80 \ 5 40 \ 4 2018 90 6 60 10 Consider the following data for Tyrovia, a country that produces only two products: guns and butter. -Refer to Table 12-11.Real GDP for Tyrovia for 2018 using 2009 as the base year equals

Gross domestic product understates the total production of final goods and services because of the omission of

Table 12-7 Product Quantity Price iPods 20 \ 125.00 T-shirts 100 20.00 Bottled water 2,000 1.00 Pranges 600 0.50 -Refer to Table 12-7.Suppose that a simple economy produces only four goods and services: iPods,t-shirts,bottled water,and oranges.Calculate nominal GDP for this simple economy.

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?

Which of the following headlines would be more closely related to what macroeconomists study than what microeconomists study?

The underground economy-the informal sector-can be a significant drag on the economies of developing countries.Why are firms in the informal sector often less efficient than firms in the formal sector?

When consumers are less confident about their jobs or incomes,they are more likely to

The underground economy can be described as

Table 12-4 Consumption expenditures \ 800 Investment expenditures 300 Government purchases 300 Govermment transfer payments 400 Exports 300 Imports 100 -Refer to Table 12-4.Consider the data above (in billions of dollars)for an economy: Gross domestic product (in billions of dollars)for this economy equals

Depreciation is

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.

Which of the following would increase GNP in the United States?