Exam 12: GDP: Measuring Total Production and Income

How can a firm have a negative valued added,as supposedly some state-owned businesses did in the former Soviet Union? What has to be true for value added to be negative?

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Question 1

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A negative value added means that the cost of the intermediate goods exceeds the price of the final product produced using the intermediate goods.For value added to be negative,a firm would use its primary factors of production,such as labor and capital equipment,to produce a product from the intermediate goods that is less valuable than the intermediate goods themselves.

The best measure of the income households actually have available to spend is

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Question 2

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

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Question 3

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If an American firm opens a production facility in India,the total value of the production will be included in the

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Question 4

National income equals gross domestic product

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Question 5

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

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Question 6

The underground economy- the informal sector -can be a significant drag on the economies of developing countries.Why are firms in the informal sector often less efficient than firms in the formal sector?

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Question 7

In the term "real GDP," what does "GDP" stand for and what does it measure? What does "real" indicate?

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Question 8

Table 12-8 Consider the following data for Tyrovia,a country that produces only two products: guns and butter. -Refer to Table 12-8.Real GDP for Tyrovia for 2011 using 2005 as the base year equals

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Question 9

Suppose Bob works for Mary as a proofreader.Mary and Bob fall deeply in love,marry and have eight children.Bob stops working for Mary in order to care for the children.What will be the effect on GDP?

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Question 10

Which of the following transactions represents the purchase of a final good?

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Question 11

Scenario 12-1 CANOES-R-US makes canoes.It buys the shell of the canoe from another firm for $300 and uses its labor and intermediate goods to make the canoe.It sells the finished canoe to a retail canoe store for $800.The retail canoe store then sells the canoe to a consumer for $1,200. -Refer to Scenario 12-1.The value added of CANOES-R-US for each canoe equals

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Question 12

In the United States since the mid-1980s,consumption as a percentage of GDP has

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Question 13

In May 2009,Ford Motor Company's sales were down 20 percent from a year earlier.These events were caused by

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Question 14

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

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Question 15

Residential investment includes spending by firms on office buildings.

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Question 16

Gross domestic product understates the total production of final goods and services because of the omission of

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Question 17

Value added equals the market price of the firm's product minus

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Question 18

Table 12-10 Consider the data shown above for Vicuna,a country that produces only two products: oranges and shirts. -Refer to Table 12-10.Real GDP for Vicuna for 2009 using 2011 as the base year equals

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Question 19

The purchase of a new house is included in

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Question 20

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How can a firm have a negative valued added,as supposedly some state-owned businesses did in the former Soviet Union? What has to be true for value added to be negative?

The best measure of the income households actually have available to spend is

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 an American firm opens a production facility in India,the total value of the production will be included in the

National income equals gross domestic product

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

The underground economy- the informal sector -can be a significant drag on the economies of developing countries.Why are firms in the informal sector often less efficient than firms in the formal sector?

In the term "real GDP," what does "GDP" stand for and what does it measure? What does "real" indicate?

Table 12-8 Consider the following data for Tyrovia,a country that produces only two products: guns and butter. -Refer to Table 12-8.Real GDP for Tyrovia for 2011 using 2005 as the base year equals

Suppose Bob works for Mary as a proofreader.Mary and Bob fall deeply in love,marry and have eight children.Bob stops working for Mary in order to care for the children.What will be the effect on GDP?

Which of the following transactions represents the purchase of a final good?

In the United States since the mid-1980s,consumption as a percentage of GDP has

In May 2009,Ford Motor Company's sales were down 20 percent from a year earlier.These events were caused by

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

Residential investment includes spending by firms on office buildings.

Gross domestic product understates the total production of final goods and services because of the omission of

Value added equals the market price of the firm's product minus

Table 12-10 Consider the data shown above for Vicuna,a country that produces only two products: oranges and shirts. -Refer to Table 12-10.Real GDP for Vicuna for 2009 using 2011 as the base year equals

The purchase of a new house is included in

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