Exam 8: GDP: Measuring Total Production and Income

Table 8-20 2016 2018 -Refer to Table 8-20.Consider the following data for a simple economy: Calculate nominal GDP and real GDP for 2018,using 2016 as the base year.Show your work.

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

When the BEA calculates real GDP using the average of prices in the current year and the year preceding it,and this average changes from year to year,this is called calculating GDP using

Real GDP is GDP in a given year

If the GDP deflator is equal to 100,then for that year nominal GDP is equal to real GDP.

Gross national product (GNP)of the United States is the market value of all final goods and services

Is nominal GDP measured in terms of quantity or in terms of dollars? If dollars,the value of the dollar from what period? Is real GDP measured in terms of quantity or in terms of dollars? If dollars,the value of the dollar from what period?

Table 8-17 A very simple economy produces three goods: movies,burgers,and bikes.The quantities produced and their corresponding prices for 2013 and 2018 are shown in the table above. -Refer to Table 8-17.What is nominal GDP in 2013?

An example of a transfer payment is

Which of the following would result in GDP for an economy equal to $10 trillion?

Explain the difference between gross domestic product and gross national product.Give an example of each.

If the GDP deflator rises from 185 to 190,what is the rate of inflation between the two years?

Suppose in 2018,you purchase a house built in 2003.Which of the following would be included in the gross domestic product for 2018?

In the circular flow diagram,the value of all the income in the economy is greater than the value of goods and services produced in the economy.

Which of the following is likely to increase measured GDP?

The value of what a U.S.-owned McDonald's produces in South Korea is included in the U.S.________ and the South Korean ________.

Table 8-31 -Refer to Table 8-31.The table above represents hypothetical data from the National Income Accounts for 2017.Use the data to calculate personal income and disposable income.

Use the formula for the GDP deflator to explain how it is affected by an increase in prices in the economy.If the value of the deflator equals 100,what does that tell you about that year with respect to the base year?

National income equals gross domestic product

If GDP calculations included measurements of pollution and environmental damage,GDP values would most likely be