Exam 8: GDP: Measuring Total Production and Income

Table 8-27 The components of national income for an economy are represented in Table 8-27 above.All values are in billions of dollars. -Refer to Table 8-27.What is the level of personal income for this economy?

Real GDP will increase

Home Depot sells new and used doors to contractors who build new homes.Home Depot also sells new and used doors to homeowners.Which of the following would be counted in GDP?

Disposable personal income equals personal income

To examine how the total production of an economy has changed over time,it would be better to examine

Which of the following is included in both the U.S.GDP and U.S.GNP?

The GDP deflator in year 2 is 105,using year 1 as the base year.This means that,on average,the cost of goods and services is

A sharp increase in the divorce rate increases the number of lawyers hired to determine divorce settlements.This will

Which of the following could cause nominal GDP to decrease,but real GDP to increase?

Statistics on real GDP during World War II may give a misleading indication of whether World War II was a period of prosperity because

If prices are rising on average,then

Table 8-1 -Refer to Table 8-1.Suppose that a simple economy produces only four goods and services: sweatshirts,dental examinations,coffee drinks,and coffee beans.Assume all of the coffee beans are used in the production of the coffee drinks.Using the information in the above table,nominal GDP for this simple economy equals

An inflation rate of 5% between 2013 and 2014 would be implied by a change in the GDP deflator from ________ in 2013 to ________ in 2014.

Table 8-3 -Refer to Table 8-3.Consider the data above (in billions of dollars)for an economy: Gross domestic product (in billions of dollars)for this economy equals

The largest component of spending in GDP is

If a U.S.firm produces cars in Mexico,that production should count towards

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?

An increase in national income could by caused by which of the following?

Table 8-25 -Refer to Table 8-25.Given the following information,calculate the rate of increase in the price level from 2012 to 2013.Use the percent change in the GDP deflator.

Since real GDP is adjusted for inflation and nominal GDP is not,nominal GDP must always be higher than real GDP.Do you agree or disagree? Why?