Exam 8: GDP: Measuring Total Production and Income

In 2013,Kendall Ford,an automobile dealership,spent $20,000 on a new car lift for its repair shop,$2,000 on a new copy machine for its sales division,and $600,000 on Ford Motor company stock.Unsold cars and trucks were valued at $400,000 on January 1,2013 and unsold cars and trucks were valued at $900,000 on December 31,2013.What is Kendall Ford's total investment spending in 2013?

To calculate GDP by the expenditure method,one must add

Which of the following is likely to increase measured GDP?

Which of the following is not true about the composition of GDP in 2012?

Recent estimates put the size of the underground economy in the United States at ________ of measured GDP.

The output of U.S.citizens who work in Canada would be included in the

In the circular flow diagram,________ supply the factors of production,and ________ goods and services.

The Bureau of Economic Analysis divides it's statistics on GDP into four major categories.List the categories of expenditures and define each.

Article Summary For only the second time in the previous 10 quarters, China's GDP grew at a faster rate than from the same period a year earlier. From July through September 2013, China's GDP increased 7.8 percent, but a decline in exports, growing inflation, and slowing growth in factory production all suggest that growth will be slowing down. China has recently been attempting to restructure its economy by moving toward increasing consumption and relying less on exports and investments as a means to achieving more sustainable economic growth. In the first nine months of 2013, 46 percent of growth was due to consumption, 56 percent was due to investment, and exports accounted for negative 1.7 percent. Source: Aileen Wang and Kevin Yao, "China's third-quarter GDP growth fastest this year, but outlook dim," Reuters, October 18, 2013. -Refer to the Article Summary.In China,________ is (are)the main driver of economic growth,while in the United States,________ is the main driver of economic growth.

Which component of consumption spending is the greatest in a typical economy?

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.

National income is derived from gross domestic product by

Which of the following statements is true?

If the GDP deflator is less than 100,which will be higher: nominal GDP or real GDP? Why?

Which of the following would increase gross private domestic investment in an economy?

The size of the underground economy as a percent of GDP is larger in the United States as compared to poorer countries such as Zimbabwe.

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

Gross domestic product is generally ________ national income.

Legalizing all forms of illegal activities

Table 8-2 -Refer to Table 8-2.Suppose that a simple economy produces only four goods and services: shoes,DVDs,tomatoes,and ketchup.Assume one half of the tomatoes are used in making the ketchup and the other half of the tomatoes are purchased by households.Using the information in the above table,nominal GDP for this simple economy equals