Exam 11: Measuring a Nations Production and Income

Which of the following is NOT a macroeconomic statement?

List four things considered to be shortcomings in the determination of GDP in relation to the use of GDP as a measure of welfare.

We ADD to the GDP when goods produced abroad are sold in the United States.

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

Define transfer payments and explain why they are not included in the government purchases section of the GDP accounts.

In the GDP accounts, investment includes the purchase of newly issued shares of stock.

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. -According to the Application, large increases in per capita income in the United States over the past 30 years have

Which of the following is the largest component of national income?

Suppose that nominal GDP in year 1 is 200 and nominal GDP in year 2 is 242. Assume that inflation is ten percent per year. How fast did the economy grow between these two years?

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

Which of the following would be a macroeconomic question?

Going to the dentist would be counted in GDP as

The four components of GDP are consumption expenditures, private investment expenditures, government purchases, and transfer payments.

Recall the Application about the size of Wal-Mart to answer the following question(s). During 2014, Wal-Mart's sales were approximately $473 billion, or roughly 2.7 percent of U.S. GDP, and its cost of sales was $358 billion. -According to this Application, by using a value-added approach to measure Wal-Mart's sales impact on the economy, we are

Suppose that a tire factory produces $825,000 of output and causes $70,000 worth of pollution as a result of production. The tire factory's official contribution to GDP would be ________ and its overall contribution to society would be ________.

Use the following information to answer the next several questions: Scenario 1: Imagine that an economy produces two goods, flashlights and fishing lures. In 2015, the economy produced 70 flashlights and 40 fishing lures, and the prices of flashlights and fishing lures were $5 and $12, respectively. In 2016, the economy produced 85 flashlights and 50 fishing lures, and the prices of flashlights and fishing lures were $7 and $15, respectively. -Based on the information in Scenario 1, real GDP grew by about ________ percent from 2015 to 2016.

The date at which a recession starts is called the

The data presented in the text shows that in the period from 1947-2013, real GDP in the United States has

A period in which real GDP in the economy declines for at least six months is referred to as

"Nominal GDP" is a measure of GDP that adjusts for price changes.