Exam 7: Measuring Domestic Output and National Income

Subtracting the purchase of intermediate products and supplies from the value of the sales of final products determines the amount of:

GDP tends to overstate economic well-being because it takes into account:

Consider the following data for a nation: The country's real GDP declined between years:

Firm A produces something that Firm B uses as an input. The product of Firm B, in turn, is purchased and used as an input by Firm C, and so on down the line through Firm E, which produces the end product. The total value added by Firms A-E from the production of the end product described here is:

(The following national income data are in billions of dollars.) Refer to the above data. Disposable income in this economy is:

Answer the question based on the following price and output data over a five-year period for an economy that produces only one good. Assume that year 2 is the base year. Refer to the above data. If year 2 is the base year, the price index for year 3 is:

Changes in business inventories are included as part of investment in the national income accounts.

In the reservoir analogy of stock and flow for the economy:

If nominal GDP in one year is $5,000 billion and the price index is 135, then the real GDP that year would be $3,704 billion.

A distinguishing characteristic of public transfer payments is that:

(The following national income statistics are in billions of dollars.) Refer to the above data. Gross domestic product in this economy is:

In the reservoir analogy for stock versus flow, the stock of capital is similar to the:

(The following national income statistics are in billions of dollars.) Refer to the above data. National income is:

In an economy that has stationary production capacity:

Personal income (PI) refers to all income:

In November 2009, Econland Motors produced an automobile that was delivered to a local dealership in December 2009. The auto was then sold to Sharon Smith for personal use in February of 2010. Following national income accounting practices, this auto would be counted as part of:

GDP tends to underestimate the productive activity in the economy because it excludes the value of output from:

Refer to the graph above. The year 2000 must be the:

Answer the question based on the following data, using year 1 as the base year. All dollars are in billions. Refer to the above data. Real GDP increased from year 3 to year 4 by approximately:

In an economy is experiencing inflation and output growth, nominal GDP will rise faster than real GDP.