Exam 10: Measuring a Nations Income

GDP is defined as the

If a U.S. company buys an electrical generator made in Japan by a Japanese firm, and the Japanese firm uses the payment to buy stocks issued by a U.S. company then

Ryan lives in an apartment where he pays $7,000 a year in rent. Alexis lives in a house that could be rented for $14,000 a year. How much do these housing services contribute to GDP?

Which of the following statements about GDP is correct?

In the economy of Ukzten in 2010, exports were $200, GDP was $2000, government purchases were $300, imports were $130, and investment was $400. What was Ukzten's consumption in 2010?

Real GDP is a better gauge of economic well-being than is nominal GDP.

The value of goods added to a firm's inventory in a certain year is treated as

Table 10-6 The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2009.Prices and Quantities Year Price of Quantity af Price af Quantity af Waffles Waffles Pancalkes Pancalkes 2008 \ 2.00 100 \ 1.00 100 2009 \ 2.00 120 \ 2.00 150 2010 \ 2.00 150 \ 3.00 200 2011 \ 4.00 180 \ 3.00 220 -Refer to Table 10-6. This country's inflation rate from 2008 to 2009 was

Suppose there are only two firms in an economy: Rolling Rawhide produces rawhide and sells it to Chewy Chomp, Inc., which uses the rawhide to produce and sell dog chews. With each $2 of rawhide that it buys from Rolling Rawhide, Chewy Chomp, Inc. produces a dog chew and sells it for $5. Neither firm had any inventory at the beginning of 2008. During that year, Rolling Rawhide produced enough rawhide for 1000 dog chews. Chewy Chomp, Inc. bought 75% of that rawhide for $1500 and promised to buy the remaining 25% for $500 in 2009. Chewy Chomp, Inc. produced 750 dog chews during 2008 and sold each one during that year for $5. What was the economy's GDP for 2008?

The overall effect of accounting for purchases of foreign goods in GDP reduces GDP.

Table 10-1 The table below contains data for country A for the year 2010. 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 -Refer to Table 10-1. What were country A's net exports in 2010?

How is net national product (NNP) calculated?

Which of the following statistics is usually regarded as the best single measure of a society's economic well-being?

Household spending on education is included in

Tyler and Camille both live in Oklahoma. A new-car dealer in Oklahoma bought a new car from the manufacturer for $18,000 and sold it to Tyler for $22,000. Later that year, Tyler sold the car to Camille for $17,000. By how much did these transactions contribute to U.S. GDP for the year?

In the economy of Ukzten in 2010, consumption was one-half of GDP, government purchases were $2000 more than investment, investment was one-sixth of GDP, and the value of imports exceeded the value of exports by $500. What was Ukzten's GDP in 2010?

A U.S. citizen buys a tea kettle manufactured in China by a company that is owned and operated by U.S citizens. In which of the following components of U.S. GDP is this transaction accounted for?

Table 10-1 The table below contains data for country A for the year 2010. 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 -Refer to Table 10-1. What were country A's exports in 2010?

Which of the following is not an example of a durable good?

GDP does not directly measure those things that make life worthwhile, but it does measure our ability to obtain many of the inputs into a worthwhile life.