Question 1

What does it mean when net factor income to the rest of the world is a positive figure?

Accepted Answer

It simply means that U.S. paym

Question 2

Why do economists add depreciation to national income to calculate GDP when using the income approach but do not do so when using the expenditure approach?

Accepted Answer

Economists want to measure income from a

Question 3

How is the capital stock at the end of the year determined?

Accepted Answer

The capital stock at the end o

Question 4

Table 6. 1
-Using the above table calculate the nominal GDP for 1987.

Accepted Answer

Bread = 6 x $1 = $6 Paper Clip

Question 5

A demographer discovers that more mothers are choosing to stay home and take care of their own children rather than send them to child care centers. An economist picks up on this information and concludes that GDP will contract as a result. How can this be possible?

Accepted Answer

GDP measures the market value of final g

Question 6

-Using the above data calculate GDP using the income approach and identify which two items on the list are superfluous in your calculation.
Difficulty: 2 Skill: Analytic Topic: GDP calculation
AACSB: Analytic Skills

Accepted Answer

Using the income approach the

Question 7

Explain and define NNP.

Accepted Answer

Net National Product is equal

Question 8

Figure 21.1
-Use Figure 21.1 which is a hypothetical production table showing the value of sales at each stage. From this information create a separate column showing the value added and determine the amount of that would be added to the official GDP of one gallon of gasoline.

Accepted Answer

@#IMG-DLM&
The amount that would be adde

Question 9

Next to each of the following items indicate in the table which items belongs to GDP and which to GNP.

Accepted Answer

The answer of Next to each of the following items...

Question 10

If NNP is $7 trillion, net investment is $500 billion and gross investment is $1 trillion determine the level of GNP.

Accepted Answer

GNP = NNP + depreciation; depr

Question 11

How are interest payments by households and government reconciled in the GDP accounts? Explain your reasoning.

Accepted Answer

Interest paid by households an

Question 12

Briefly explain under what condition, if any, net investment can be negative. If so, explain what this implies about the capital stock.

Accepted Answer

Net investment equals gross investment m

Question 13

Table 6. 1
-Using Table 6.1 calculate Real GDP in 1987 using 1988 as the base year.

Accepted Answer

Bread will be valued

Question 14

Assume that in a given year there is negative inventory investment. What is the relationship between final sales and GDP? Comment on how this could be possible.

Accepted Answer

Final sales must have exceeded

Question 15

Figure 21.2 
-Using the expenditure approach, calculate gross domestic product given Figure 21.2 above.

Accepted Answer

Gross domestic product is the

Question 16

Explain why each of the following items is excluded from GDP: (a) profits from the stock and bond market (b) transfer payments (c) sale of used goods (d) goods and services produced in the home.Explain why the following items are included in GDP: (a) depreciation (b) change in business inventories( c) indirect taxes

Accepted Answer

Profits from the sale of stocks and bond

Question 17

Critically evaluate the following statement. "GDP is a proxy for the standard of living but not a direct measure."

Accepted Answer

This is an accurate statement. In fact,

Question 18

Give an example of how real GDP could be increased even though no more output is produced.

Accepted Answer

Real GDP could be increased even though

Question 19

What is the underground economy and what is its relationship if any to the value of GDP?

Accepted Answer

The underground economy is the part of t

Question 20

What is the relationship between total production and sales? Explain.

Accepted Answer

Regarding GDP, it is important to rememb

What does it mean when net factor income to the rest of the world is a positive figure?

Why do economists add depreciation to national income to calculate GDP when using the income approach but do not do so when using the expenditure approach?

How is the capital stock at the end of the year determined?

Table 6. 1 -Using the above table calculate the nominal GDP for 1987.

A demographer discovers that more mothers are choosing to stay home and take care of their own children rather than send them to child care centers. An economist picks up on this information and concludes that GDP will contract as a result. How can this be possible?

-Using the above data calculate GDP using the income approach and identify which two items on the list are superfluous in your calculation. Difficulty: 2 Skill: Analytic Topic: GDP calculation AACSB: Analytic Skills

Explain and define NNP.

Figure 21.1 -Use Figure 21.1 which is a hypothetical production table showing the value of sales at each stage. From this information create a separate column showing the value added and determine the amount of that would be added to the official GDP of one gallon of gasoline.

Next to each of the following items indicate in the table which items belongs to GDP and which to GNP.

If NNP is $7 trillion, net investment is $500 billion and gross investment is $1 trillion determine the level of GNP.

How are interest payments by households and government reconciled in the GDP accounts? Explain your reasoning.

Briefly explain under what condition, if any, net investment can be negative. If so, explain what this implies about the capital stock.

Table 6. 1 -Using Table 6.1 calculate Real GDP in 1987 using 1988 as the base year.

Assume that in a given year there is negative inventory investment. What is the relationship between final sales and GDP? Comment on how this could be possible.

Figure 21.2 -Using the expenditure approach, calculate gross domestic product given Figure 21.2 above.

Critically evaluate the following statement. "GDP is a proxy for the standard of living but not a direct measure."

Give an example of how real GDP could be increased even though no more output is produced.

What is the underground economy and what is its relationship if any to the value of GDP?

What is the relationship between total production and sales? Explain.

The Scope and Method of Economics

The Economic Problem: Scarcity and Choice

Demand, Supply, and Market Equilibrium

Demand and Supply Applications

Introduction to Macroeconomics

Unemployment, Inflation, and Long-Run Growth

Aggregate Expenditure and Equilibrium Output

The Government and Fiscal Policy

The Money Supply and the Federal Reserve System

Money Demand and the Equilibrium Interest Rate

The Determination of Aggregate Output, the Price Level, and the Interest Rate

Policy Effects and Costs Shocks in the Asad Model

The Labor Market in the Macroeconomy

Financial Crises, Stabilization, and Deficits

Household and Firm Behavior in the Macroeconomy: a Further Look

Long-Run Growth

Alternative Views in Macroeconomics

International Trade, Comparative Advantage, and Protectionism

Open-Economy Macroeconomics: the Balance of Payments and Exchange Rates

Economic Growth in Developing and Transitional Economies

Filters

Exam 6: Measuring National Output and National Income

What does it mean when net factor income to the rest of the world is a positive figure?

Why do economists add depreciation to national income to calculate GDP when using the income approach but do not do so when using the expenditure approach?

How is the capital stock at the end of the year determined?

Table 6. 1 -Using the above table calculate the nominal GDP for 1987.

A demographer discovers that more mothers are choosing to stay home and take care of their own children rather than send them to child care centers. An economist picks up on this information and concludes that GDP will contract as a result. How can this be possible?

-Using the above data calculate GDP using the income approach and identify which two items on the list are superfluous in your calculation. Difficulty: 2 Skill: Analytic Topic: GDP calculation AACSB: Analytic Skills

Explain and define NNP.

Figure 21.1 -Use Figure 21.1 which is a hypothetical production table showing the value of sales at each stage. From this information create a separate column showing the value added and determine the amount of that would be added to the official GDP of one gallon of gasoline.

Next to each of the following items indicate in the table which items belongs to GDP and which to GNP.

If NNP is $7 trillion, net investment is $500 billion and gross investment is $1 trillion determine the level of GNP.

How are interest payments by households and government reconciled in the GDP accounts? Explain your reasoning.

Briefly explain under what condition, if any, net investment can be negative. If so, explain what this implies about the capital stock.

Table 6. 1 -Using Table 6.1 calculate Real GDP in 1987 using 1988 as the base year.

Assume that in a given year there is negative inventory investment. What is the relationship between final sales and GDP? Comment on how this could be possible.

Figure 21.2 -Using the expenditure approach, calculate gross domestic product given Figure 21.2 above.

Critically evaluate the following statement. "GDP is a proxy for the standard of living but not a direct measure."

Give an example of how real GDP could be increased even though no more output is produced.

What is the underground economy and what is its relationship if any to the value of GDP?

What is the relationship between total production and sales? Explain.

The Scope and Method of Economics

The Economic Problem: Scarcity and Choice

Demand, Supply, and Market Equilibrium

Demand and Supply Applications

Introduction to Macroeconomics

Unemployment, Inflation, and Long-Run Growth

Aggregate Expenditure and Equilibrium Output

The Government and Fiscal Policy

The Money Supply and the Federal Reserve System

Money Demand and the Equilibrium Interest Rate

The Determination of Aggregate Output, the Price Level, and the Interest Rate

Policy Effects and Costs Shocks in the Asad Model

The Labor Market in the Macroeconomy

Financial Crises, Stabilization, and Deficits

Household and Firm Behavior in the Macroeconomy: a Further Look

Long-Run Growth

Alternative Views in Macroeconomics

International Trade, Comparative Advantage, and Protectionism

Open-Economy Macroeconomics: the Balance of Payments and Exchange Rates

Economic Growth in Developing and Transitional Economies

Filters